9.pptTRANSNATIONAL CORPORATIONS
- Stock ownership often blurs national ownership
- Tend to spread operations across international boundaries
- Are often headquartered in World Cities and have close ties to international financial markets
TRANSNATIONAL CORPORATIONS
- Seek new international locations which offer market access or advantageous manufacturing costs
- This often involves spatial separation of different stages of production. In extreme form headquarters may be in one continent while production and regional management in another
TRANSNATIONAL CORPORATIONS
- This new international division of labor is predicated on “enabling technologies” which provide a “permissive environment” for decentralization while maintaining central coordination
TRANSNATIONAL CORPORATIONS
- These “enabling technologies” are developments in communication and transportation, and in corporate organization
Nike Shoe Co. in China
- Nike, headquartered in Oregon, has offices and factories all over the world
- Raw materials are purchased in worldwide commodity markets and sent from source to factory
- Control is maintained using technology
Nike Shoe Co. in China
- Nike diffuses it it’s designs, methods of operation, and corporate culture; this is a modern example of Trade Progression
Ford International
- Ford has over 300,000 employees spread over 30 countries
- While most car companies produce for their domestic market Ford sells more than 2/3 of it’s 5 million vehicle annual production outside the US.
Ford Europe
- Headquartered in Britain Ford produces cars in Europe for the European market.
- The Ford Escort uses parts from 15 countries located on 3 Continents.
- This give Ford access to market, access to a skilled workforce and efficiency of distribution
