MULTI/TRANSNATIONAL

ORGANIZATION AND
TECHNOLOGY

Abstract
How does Multi/Transnational Organization and Technology facilitate Globalization?
What is a Transnational Organization?

This is a business organization/corporation/enterprise that has its headquarters (parent

company) in one country (Usually advanced capitalist/industrialized countries) and has
branches/subsidiaries/franchises and plants in many countries.
They seek out the best profit opportunities. They are not concerned with issues such as
poverty, inequality and unemployment alleviation. Such organizations carry out substantial
amounts of financing, production sales research and development in their foreign operations.

They have great economic power.

They are usually based on manufacturing or mineral industries and operate in fields that
involve frequent technological change.
A MNC may have few plants in one country that produces complete products to be sold
in several countries while in other cases the plants in many countries may produce
component or parts of the finished products.
This gives MNCs a large area from which to choose the most economical locations for
specialized plants.
Some of the largest TNCs are: BP, Google, AT&T, Coca-Cola, Nike, Microsoft, and Nestle.
More than half of all TNCs are owned by just five nations: France, Germany, the
Netherlands, Japan and the US.

TNCs effect Globalization in many different ways.

One way that TNCs have spread Globalization is through Cheap International Marketing.
Wealthy TNCs often utilize the vast resources of people for cheap labour in LEDCs such as
China and other parts of Asia and Africa.

By investing in a developing country, a TNC is able to benefit from cheap labour as developing
countries usually do not have any form of national minimum wage. This means that the TNCs
costs are kept to a minimum thus creating productive efficiency. If costs are low, profit should
remain high which can then be used to reinvest into product innovation and new technology.
The aim of this investment is to crush all local and/or lesser companies, thus becoming the
dominant corporation.

Thanks to the intelligent investments TNCs make in LEDCs, some TNCs can become huge
(e.g. Nike, Adidas, Coca-Cola) and can even earn more money in a year than some countries.

Another way that TNCs spread Globalization is through the concept of the 'Uninformative
Product' which is where a company will release only one product, one after the other.
For example, Apple release the IPod Classic, then the IPod Nano, shuffle, IPhone, IPad etc.).
This means that everyone will desire the latest and the best product the company has to offer.
TNCs also spread Globalization by destroying local competitors in the LEDCs. Many companies
Will invest offices and factories in LEDCs and then, by attracting plenty but cheap labour,
quickly dominate and crush the lesser companies and businesses. This means less competition,
which equals more money, sales and success in the TNC.

TNCs effect Globalization in many different ways.

In addition, TNCs have help spread Globalization through the use of Advertising.
Advertising is an extremely significant and effective way to spread TNCs and thus Globalization
as it promotes ideas, concepts and stock all across the globe.
Advertising comes in many forms such as:

Television
Internet
Billboards
Posters
Magazines

The Impact of TNCs on the Caribbean

The West and its multinational corporations (MNCs) have been known to exploit the region of the
Caribbean for their profit and these nations are experiencing extreme rates of poverty, repressed
human rights, and excessive environmental damage. Evidence supplied by The World Bank and the UN
strongly suggests that MNCs are a key factor in the large improvement in welfare that has occurred in
developing countries over the last 40 years. For example, in Jamaica, banana planters and other farmers
are facing a great loss in profits due to the importation of foreign goods. They also face a loss in their
milk production as the population rather the imported powered milk. Additionally, many factories are
being operated in the Caribbean region in which individuals are being paid below the minimum wage for
their labour to produce clothing that will be exported to the West. As a result of the establishment of
the Free Trade Zone, women are exploited and subjected to sweatshop conditions. The free zone is
located in Jamaica but owned by multinational corporations such as Hanes and other American
clothing companies that operate worldwide. Wages are low and offer no guarantees. When
production becomes too expensive or can be done more cheaply somewhere else, by someone else,
the companies get up and leave, often without even paying the Jamaican workers. (Black, 2001.)