Download Transnational Corporations: The Primary `Movers and Shapers` of

© Peter Dicken 2015
Transnational Corporations:
The Primary ‘Movers and
Shapers’ of the Global
Economy
Global Shift
Chapter 5
Review
• Concepts to Review
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FDI
Global production networks (GPNs)
Transportation and communication technologies
Product life cycle
Convergence and divergence
• Key Words
– Transnational corporations, uneven distribution of
resources, geographical embeddedness, the internal
geographies of TNCs, corporate restructuring
Nature of the TNC
• Definition
– ‘A transnational corporation is a firm that has the
power to coordinate and control operations in more
than one country, even if it does not own them’
– Two basic characteristics
• They are networks within networks
• Control and coordination is more complex than a domestic
firm
• The myth of the ‘global’ corporation
• Geographical embeddedness
• Connections to globalization
Development of TNCs
• Product life cycle explanation
• Strategy of beginning with a strong domestic position
and then expanding geographically
– links in with product life cycle
 new products thus reflect the domestic market, then move to
other markets as the domestic market becomes saturated
• Other evolutionary paths
– Firms from small markets often set up overseas production
facilities without using intermediaries
– Acquisition of another domestic firm which already has foreign
operations; virtually all TNCs include merger and acquisition as
part of their development
Geography of TNCs
• Forms of development
– Bartlett and Ghoshal’s typology
• ‘global product’, ‘worldwide geographical’ or ‘global grid’ or
‘global matrix’ structures
– Firms combining traits to form integrated production
networks
• Convergence/divergence debate
• Impact of locality
TNCs as Networks
• Outsourcing
• Types of production networks
• Collaboration and competition
• Corporate reorganization/restructuring
• Re-shoring