跨国公司管理1

1、CHAPTER 1Globalization and Regional Economic Integration1INTRODUCTION Transnational Corporationan enterprise such as one “which controls assets, factories, mines, sales offices, and the like in two or more countries.”In 1973How has the United Nations defined the TNC?2an enterprise (a) comprising ent

2、ities in two or more countries, regardless of the legal form and fields of activity of those entities, (b) which operates under a system of decision-making permitting coherent policies and a common strategy through one or more decision-making centers, (c) in which the entities are so linked, by owne

3、rship or otherwise, that one or more of them may be able to exercise a significant influence over the activities of the others, and, in particular, to share knowledge, resources, and responsibilities with others.In 1984How has the United Nations defined the TNC?3Our definition of TNCsAn enterprise h

4、as substantial direct investment in foreign countries and actively manages those operations and regards those operations as integral parts of the company both strategically and organizationally.4TNCs ManagementFormulation of strategies and management systems to take advantage of international opport

5、unities and respond to international threats5TNCs in the global economyThe universe of TNCs is large, diverse and expanding.Some TNCs are bigger than countries. The largest TNCs remain geographically concentrated in a few home countries. 6The degree of transnationality a measure of the relative econ

6、omic importance of foreign affiliates in total economic activityThe Transnationality Index is calculated as the average of the following three ratios: foreign assets to total assets, foreign sales to total sales and foreign employment to total employment.Transnationality IndexTNI7Other measures of t

7、ransnationalityThe Internationalization Index (II) is the ratio of a TNCs foreign affiliates to total affiliatesThe Geographical Spread Index (GSI) , is calculated as the square root of the Internationalization Index multiplied by the number of host countries. 8What is globalization?The shift toward

8、s a more integrated and interdependent world economy Two components:The globalization of marketsThe globalization of production9Globalization of Markets“Merging of historically distinct and separate national markets into one huge global marketplace.”The needs of customers for many products and servi

9、ces are growing more similar. And customers search the world for their supplies regardless of national boundaries.Many firms offer a standardized product worldwide.10The Largest Global MarketsNot Consumer GoodsBut Industrial Goods and MaterialsCommodities such as aluminum, oil and wheat.Industrial p

10、roducts such as microprocessors, aircraft.Financial assets such as U.S. Treasury bills and Eurobonds.11Globalization of Production“The sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (labor,ener

11、gy, land and capital).”Many much smaller firms are also getting into the global dispersal of production and design as well as giants such as Boeing. To lower their overall cost structure and/or improve the quality or functionality of their product.“Global Products”12Global driversTwo macro factors t

12、hat underlie trend towards greater globalizationDecline in trade and investment barriersGlobalization of markets and production has been facilitated by reduction in trade barriers and removal of restrictions to foreign direct investment.Technological changesMicroprocessors and telecommunicationsThe

13、internet and world wide webTransportation technology13Implications for Production and Market GlobalizationProduction dispersed to economical locations due to transportation and communication advances.New markets opened through WWW.Jet aircraft move people and goods.Global media creating a worldwide

14、culture.14Globalization debate-ProLower prices for goods and servicesEconomic growth stimulationIncrease in consumer incomeCreates jobsCountries specialize in production of goods and services that are produced most efficiently15Globalization debate-ConDestroys manufacturing jobs in wealthy, advanced

15、 countriesWage rates of unskilled workers in advanced countries declinesCompanies move to countries with fewer labor and environment regulationsLoss of sovereignty16Effects on Managers Globalization: Pros& Cons Great opportunities for managers.Increased revenue opportunity through global sales.Reduc

16、ed costs by producing in low cost countries.Managers now face a more dynamic and exciting job due to global competition.Should vary its practices country by country. Must work within government regulations.Currency conversion presents unique problems17Regional Economic IntegrationRegional economic i

17、ntegration refers to the process whereby countries in a geographic region cooperate to reduce, and ultimately remove, tariff and nontariff barriers to the free flow of goods, services, and factors of production between each other. 18Level of Economic IntegrationFree Trade AreaCustoms UnionCommon Mar

18、ketEconomic UnionPolitical Union19Economic IntegrationFree Trade AreaAll barriers to trade among members removed.Each country can determine own trade policies toward nonmembers.Customs UnionEliminates barriers among members and has a common external trade policy.Common MarketAllows factor of the pro

19、duction to move freely between members.Economic UnionNo barriers among members, common external policy, common monetary and fiscal policy, harmonized tax rates and common currency.Political UnionHas a coordinating bureaucracy accountable to all citizens.20Case For Regional Integrationan attempt to a

20、chieve economic gains from the free flow of trade and investment. Their political weight would be enhanced in the world by grouping their economic.It is easier to gain agreement among a limited number of neighboring countries.21Case Against Regional IntegrationIt is never without costs for the minor

21、ity. Loss of jobsEnvironment degradationFirms in developing countries have to compete against efficient firms from developed countries.Concerns over national sovereignty often slow or stop integration attempt.22Trade creation and trade diversionTrade creation occurs when high-cost domestic producers

22、 are replaced by low-cost producers within the free trade area.Trade diversion occurs when low-cost external suppliers are replaced by high-cost suppliers within the free trade area.Regional integration will not increase economic welfare if the trade creation effects in the free trade area are outwe

23、ighed by the trade diversion effects.23Regional economic integration in EuropeEurope has two trade blocksEuropean UnionSeen as the emerging power with almost 27 membersEuropean Free Trade AssociationHas only four members24Evolution of the European UnionProduct of two political factors:Devastation of

24、 WWI and WWII and desire for peaceDesire for European nations to hold their own, politically and economically, on the world stage1951 - European Coal and Steel Community.1957- Treaty of Rome establishes the European Community1994 - Treaty of Maastricht changes name to the European Union25Regional ec

25、onomic integration of the AmericasRegional economic integration is on the rise in the Americas NAFTAMERCOSURPlans for FTAA26 NAFTAEnforced in January, 1994, Over 10 year period: tariffs reduced (99% of goods traded)Removal of most barriers on cross border flow of servicesProtection of intellectual p

26、roperty rightsApplies national environmental standardsEstablishment of commission to police violationsRemoval of restrictions on FDI except in certain sectorsMexican railway and energyUS airline and radio communicationsCanadian culture27ANCOM: Andean PactBolivia, Colombia, Ecuador, Peru, VenezuelaCa

27、rtagana Agreement, 1969. Nearly failed. Galpagos Declaration, 1990.The establishment of a free trade area by 1992; a customs union by 1994; a common market by 1995.Still has many political and economic problems.28The Mercosur 1988: Argentina, Brazil. 1990: Paraguay, Uruguay 1995: Agreed to move towa

28、rd a full customs union.Positive:Trade quadrupled between 1990-1998.The combined GDP grew at a rate of 3.5 between 1990-1996.Roadblock:Has significant trade diversion issues.Economic problems, first in Brazil (1999), then in Argentina (2001) has put plans for the customs union on hold.29Regional trade blocs in Asia : ASEANCreated in 1967Objective to achieve free trade between member countries and achieve cooperation in their industrial Brunei, Indonesia, Laos, Malaysia, th