Essay discussing how multinational corporations can be a driving force with the economy of the state
Trends in the Rise of Multinational Corporations
Firms have taken their business to the international level, where they have exposure to more resources, markets, and customers. Following the internationalization of business, various trends have emerged. This paper will discuss the trends in the rise of multinational corporations.
Transnational coordination of production has arisen due to the rise of multinational corporations (Jstor.org., 2021). At the international level, there exists coordination of sales-marketing decisions and production decisions. Operations and processes at the global level are usually managed by the parent company since all the firms are integrated. The firms at the global level owe their allegiance only to their parent company and not any other country.
Labor at the international level is also coordinated (Jstor.org., 2021). The number of employees and staff to be hired for various operations is decided by the parent family. Decision-making is centralized, and no firm at the global level can be able to make decisions on their own.
Government coordination has boosted the operation of firms in several countries (Jstor.org., 2021). Firms located in foreign nations are a source of revenue to the nation through payment of taxes. With respect to that, governments provide suitable business environments for foreign firms by removing barriers and restrictions, allowing for smooth business operations. The foreign firms also create employment for the locals, thus uplifting their living standards, and as a result, enhancing the GDP.
Through multinational corporations, the monopoly in the business has been born at the international level (Jstor.org., 2021). Focusing on a niche market has allowed companies to produce quality goods and products and outstanding while maintaining a secret to their trading formula. Specializing in a particular business and the production of related products has boosted firms.
Multinationals have given rise to income distribution at the international level (Jstor.org., 2021). Firms operating on the international level usually make use of both the skilled and unskilled labor from the country they are operating from. Such an action allows them to ensure that the locals' living standards are improved, allowing them to afford the products that the firm produces through its parent company. Paying wages and salaries to the workers allows for income distribution.
Amid the covid19 pandemic, companies have turned to a technology whereby they have automated all their processes and operations (Kovar, 2021). Technologies such as FinTech have been embraced by most of the companies' world over. Resilience is one of the goals for every company, for they require being running at all times despite surging disasters that may interrupt their business. Companies are investing in technology to provide an omnichannel as a one-stop-shop for the customers where they will be able to do their shopping from the comfort of their home. The use of machines and information systems is gradually replacing human labor, for most of the workers are working from home.
Jstor.org. (2021). The Rise of the Multinational Corporation and United States Trade Policy on JSTOR. Retrieved 17 April 2021, from <span style="font-size:12.0pt;line-height:200%;font-family:"Times New Roman",serif; background:white">https://www.jstor.org/stable/42859206?seq=9#metadata_info_tab_contents</span>.
Kovar, J. (2021). COVID-19 Accelerating Digital Transformation: McKinsey. CRN. Retrieved 17 April 2021, from <span style="font-size:12.0pt;line-height:200%;font-family:"Times New Roman",serif; background:white">https://www.crn.com/slide-shows/channel-programs/covid-19-accelerating-digital-transformation-mckinsey</span>