Transnational Corporations
Multinational corporations have complex relationships to local development processes in the context of the globalization of production systems. Identify some of the major conceptual issues in framing these relationships, and some of the principal types of relationships between MNE and spatially delimited territories such as cities, regions, metropolitan areas and nations that exist today.
The creation of relationships between multinational corporations ("MNE") and local development processes has been explained through several micro-level approaches to understanding the internalization of economic activity using a firm specific approach (Dicken 2003, p. 202). The wide variations in the characteristics and behaviors of transnational corporations ("TNC") of different source nations require the consideration of the diversity of the world's population (Dicken 2003, p. 202). There are several theories that explain why companies become global, including Hymer, Vernon and Dunnings theories, but these theories do not all explain how globalization occurs (Dicken 2003, p. 207).
There are two main types of global production that companies follow: market oriented production and asset oriented production (Dicken 2003, p. 208). Market oriented production is a form of horizontal expansion in which a company invests in manufacturing and service industries to serve a particular geographic region (Dicken 2003, p. 208). The two important characteristics of the local market considered for expansion are size (in terms of per capita income) and the markets structure of demand (Dicken 2003, p. 208). Because per capita income varies greatly in different areas of the world, having the highest population of persons is not an indicator that the country has consumers who are able to pay for the goods produced (Dicken 2003, p. 208). As the per capita income of the population rises, so does the demand for goods and services (Dicken 2003,...
" The analysis cited above continues to describe the ways in which corporate "life" (in the sense of how many different individuals and entities are vital to the running of a corporation in the current climate): Businesses today must be consumer, profit, and publicly oriented. Only a few years ago, the first two would have sufficed. But, in support of our dualistic argument regarding the marketing concept, that is -- creating exchanges
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Still, what has to be mentioned at this state is that the productivity is increased at the level of repetitive team tasks. In other words, when the tasks of the team are less repetitive, when they are new and involve creativity, the productivity of the team decreases. This is explained by the fact that the members in a homogenous team are alike and tend to have the same reaction
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