Transnational Corporation, also known as Multi-national Enterprise, International Firm, Supernational Enterprise and Co *** o-corporation )wait. In the early 1970s, the Economic and Social Council of the United Nations formed a group with the participation of eminent persons. After a relatively comprehensive examination of various norms and definitions of transnational corporations, a resolution was made in 1974 (Jiayin Year), deciding that the United Nations would uniformly adopt " multinational company". Basic introduction Chinese name: Transnational Enterprise Foreign name: Transnational Corporation Also known as: Multinational Corporation Definition: The product of highly developed monopoly capitalism English name, production and development, nature, operating characteristics, influence, employment strategy, English name Transnational Corporation/Non-aligned firms/Multinational enterprise/MNE The emergence and development of multinational corporations is the product of the high development of monopoly capitalism. Its emergence is closely related to capital export. At the end of the 19th century and the beginning of the 20th century, capitalism entered the monopoly stage and capital exports developed greatly. Only then did a few multinational companies begin to appear. At that time, some large enterprises in developed capitalist countries established overseas branches and subsidiaries through foreign direct investment and began transnational operations. For example, the Singer Sewing Machine Company, Westinghouse Electric Company, Edison Electric Company of the United States, and the Imperial Chemical Company of the United Kingdom have all successively operated abroad. These companies were the forerunners of modern multinational corporations. During the interwar period, multinational corporations grew in number and size. After World War II, multinational corporations developed rapidly. The number, scale, foreign production and sales of American multinational corporations rank first in the world. According to the ranking of global multinational companies in the "1993 World Investment Report" published by the United Nations Conference on Trade and Development, the top ten are Royal Dutch Shell, Ford, GM, Exxon, IBM, British Petroleum, Asea Brown Boveri, a joint venture between Sweden and Switzerland, Nestle from Switzerland, Philips from the Netherlands, and Mobil from the United States. The United States accounts for five of the top ten. This is a ranking by companies' overseas assets. If ranked by sales, the United States still ranks first. In the 1987 pyramid of the world's largest multinational companies ranked by sales, 10 of the 23 companies at the top were from the United States, with average annual sales of US$25 billion each. Among the 52 companies immediately below the top of the tower, 21 are in the United States, with average annual sales of US$10 billion each. In 1987, the total sales of the 600 world's largest multinational companies reached US$4 trillion, of which the United States accounted for 42%, Western Europe accounted for 32%, Japan accounted for 18%, and developing countries and regions accounted for only 2%. Lujiazui, Pudong, Shanghai, where multinational companies gather. From the perspective of profit and income, the profits of American multinational companies were above the average level from 1980 to 1987, while the profits of Japanese multinational companies were below the average level. This may be related to the fact that Japan invested heavily in scientific research and innovation activities during this period in order to strengthen competition, while the proportion of research and development expenses of American multinational companies in sales declined during this period. According to statistics from relevant United Nations agencies in 1993, there are 37,000 multinational companies in the world, with a total of 170,000 overseas subsidiaries. Of the 37,000 parent companies, 90% are from Western countries, and about half of the 90% belong to the United States, Japan, Germany, the Netherlands, and Italy. There are only 2,700 multinational companies in developing countries and regions. In the development of multinational companies, the United States occupies an absolutely important position and proportion, and Japan, as a rising star, is chasing after it and cannot be underestimated.

According to the 1993 ranking of the world's largest multinational companies by the authoritative magazine "Happiness", in order of sales, the United States ranked first among the world's 500 largest industrial companies in 1993, with 159 companies on the list, including General Motors, Ford Motor and Exxon. Ranking among the top three; Japan is closely followed by the United States, with 133 companies shortlisted. Also on the list are: 41 companies from the United Kingdom, 32 companies from Germany, 26 companies from France, 12 companies from South Korea, 12 companies from Sweden, 10 companies from Australia, and 9 companies from Switzerland. Among the world's top 500 service companies, the United States accounts for 136, the United Kingdom and Germany each have 43, Japan has 40 companies, Mitsui Company ranks first, France has 29 companies, Canada has 17 companies, Italy has 15 companies, and Spain has 14 companies. Nature: Transnational corporations mainly refer to monopoly enterprises in developed capitalist countries. They are based in their own country and set up branches or subsidiaries around the world through foreign direct investment to engage in international production and business activities. The United Nations Committee on Transnational Corporations believes that a transnational company should have the following three elements: First, a transnational company refers to an industrial and commercial enterprise, and the entities that make up this enterprise operate business in two or more countries, regardless of the legal form it takes. operations, regardless of the economic sector in which they operate; second, such enterprises have a central decision-making system and thus have uniform policies that may reflect the global strategic goals of the enterprise; third, such enterprises entities share resources, information, and responsibilities. Operational Characteristics Global Strategy and Centralized Management As a company with many branches at home and abroad and engaged in global production and operation activities, multinational companies have some differences compared with domestic enterprises. These differences are reflected in: 1. The strategic goals of multinational companies are oriented to the international market and aim to maximize global profits, while domestic enterprises are oriented to the domestic market. 2. Multinational companies control foreign enterprises through holdings, while domestic enterprises mostly control their less foreign-related economic activities through contracts. 3. The foreign-related activities of domestic enterprises do not involve the establishment of economic entities abroad. The relationship between domestic and foreign economic activities is loose and highly contingent. Their foreign-related economic activities are often terminated immediately after the transaction is completed and no longer participate in future reproduction. process; while multinational companies conduct comprehensive trading activities of capital, goods, talents, technology, management and information in various fields around the world, and this "package" of activities must be in line with the company's overall strategic goals and under the control of the parent company Next, its subsidiaries also participate in the local reproduction process like foreign enterprises. Therefore, multinational companies must implement highly centralized unified management of their branches. Engage in integrated diversified operations The forms of integrated diversified operations conducted by multinational companies are 1. Horizontal horizontal diversified operations. Such companies are mainly engaged in the production and operation of a single product. There is little professional division of labor between the parent company and its subsidiaries, but the amount of intangible assets such as production technology, sales skills, trademarks and patents transferred within the company is relatively large. 2. Vertical diversification. Such companies can be divided into two types according to their business content. One is that the parent company and its subsidiaries produce and operate products in different industries but related to each other. They are cross-industry companies, mainly involved in the production and processing of raw materials and primary products, such as mining and planting → refining → processing and manufacturing → sales and other industries. The other is that the parent company and its subsidiaries produce and operate products with different processing levels or stages in the same industry, mainly involving industries with a high level of specialized division of labor such as automobiles and electronics. For example, Mobil Oil Company in the United States is the former vertical multinational company. It engages in the exploration and production of oil and natural gas on a global scale, transports oil and natural gas through pipelines, oil tanks, and vehicles and ships, operates large refineries, and refines crude oil. Produce final products, wholesale and retail hundreds of petroleum derivative products. France's Poirot Citro?n Automobile Company is the latter type of vertical multinational company. It implements a professional division of labor within the company. It has 84 subsidiaries and sales agencies abroad, which are engaged in molding, casting, engines, gears, and reducers. , mechanical processing, assembly and sales, etc., to achieve vertical integration of production and operations. 3. Mixed diversified operations. Such companies operate a variety of products. The parent company and subsidiaries produce different products and operate different businesses, and they are not connected to each other and have no necessary connection. This is the case for Japan's Mitsubishi Heavy Industries.

It was originally a shipbuilding company and later changed to a mixed business. Its business scope includes: automobiles, construction machinery, power generation system products, shipbuilding and steel components, chemical industry, general machinery, aircraft manufacturing, etc. Reasons for attaching importance to diversification: 1. Enhance the overall economic potential of monopoly enterprises, prevent the formation of "excess" capital, ensure the safe development of multinational companies, and be conducive to the realization of global strategic goals. 2. It is conducive to the reasonable flow and distribution of funds and improves the utilization rate of various production factors and by-products. 3. Facilitate risk diversification and stabilize the economic returns of the enterprise. 4. Can make full use of production spare capacity, extend product life cycle, and increase profits. 5. It can save contract costs and enhance corporate flexibility. Develop new technologies to promote development. Since the war, new technologies, new production processes, and new products around the world have basically been in the hands of multinational corporations. This is one of the fundamental reasons why multinational corporations have been able to continue to grow and develop for decades. . Usually multinational companies invest a lot of manpower and material resources to develop new technologies and products. For example, in the mid-to-late 1980s, the AT&T Research and Development Center had an average annual research funding of US$1.9 billion and employed 15,000 scientific researchers, 2,100 of whom had received doctorates, and 4 of whom had won 4 Nobel Prizes. Physics Prize. Another example is the well-known 3M Company. In the summer of 1994, nearly 400 types of semi-combined hardware products were newly launched. New products emerge in an endless stream. The reason for this is explained by the marketing manager of the DIY product department of 3M Canada Branch: The company's annual turnover 7% of the total is spent on developing new products. The business objective is that 30% of annual sales revenue must come from new products that were not launched 4 years ago. This shows that his research is advanced. Multinational companies not only focus on developing new technologies, but are also very good at obtaining high profits through external technology transfer and exercising control over branches and subsidiaries. Competing and monopolizing foreign markets In international trade, the traditional means of competition is price competition. That is to say, enterprises reduce production costs and use prices lower than those of similar products in the international market or other enterprises to combat and exclude competition in foreign markets and expand product sales. Nowadays, due to the improvement of living standards around the world, especially in developed countries, the increase in the proportion of durable consumer goods expenditures in total expenditures, the continuous rise in prices caused by continued inflation around the world, and the general shortening of product life cycles, prices have Competition has made it difficult for multinational companies to win the most customers, and has been replaced by non-price competition. Facts have proved that non-price competition is the main means for contemporary multinational companies to monopolize and compete for the market. Non-price competition refers to means such as improving product quality and performance, increasing color and variety, improving product packaging, decoration and specifications, improving pre-sales and after-sales services, providing preferential payment terms, updating trademarks, strengthening advertising and ensuring timely delivery, etc. To improve the quality, reputation and popularity of products, to enhance the competitiveness of products and expand the sales of products. Multinational companies mainly improve the non-price competitiveness of goods from the following aspects: ① improve product quality and overcome technical barriers to trade; ② strengthen technical services, improve product performance and extend the service life; ③ provide credit; ④ accelerate product upgrading and continuously launch new products. Products, update colors and varieties; ⑤ Continuously design novel and diverse packaging and decoration, paying attention to the "personalization" of packaging and decoration; ⑥ Strengthen advertising and vigorously research and improve advertising and sales techniques. Diversification of business methods Compared with general domestic enterprises or general foreign-related companies, multinational companies have significantly more global production and business methods, including import and export, licenses, technology transfer, cooperative operations, management contracts and the establishment of overseas subsidiaries. wait. Among them, the main form of establishing overseas subsidiaries is to develop and expand its global business. Impact: Promote the growth of international trade. In 1993, there were 37,000 multinational companies around the world, and their overseas subsidiaries totaled 170,000. Since 1982, multinational companies have grown very rapidly. By the end of 1992, global overseas direct investment had accumulated to US$2 trillion, one-third of which was in the hands of the top 100 large enterprises. In 1992, the overseas sales of global multinational corporations totaled US$5.5 trillion, which was US$1.5 trillion higher than the value of merchandise exports. It can be seen that overseas investment by multinational companies plays a greater role in the world economy than domestic trade. In fact, multinational corporations have become the most active and influential force in contemporary international economy, science and technology, and international trade. And this power will be strengthened with the overall upward trend of investment by multinational companies.

The development of multinational corporations in developed countries has greatly promoted the foreign trade of developed countries after the war. These effects include enabling the products of developed countries to be produced and sold in host countries through foreign direct investment, thereby bypassing trade barriers and improving the competitiveness of their products; from the perspective of raw materials and energy, reducing the cost of existing products. The dependence of developed countries on developing countries also makes it easier for products from developed countries to enter and utilize the host country's foreign trade channels and to easily obtain business intelligence information. Developing countries 1. Foreign direct investment and private credit from multinational corporations have supplemented the shortage of import funds in developing countries. 2. The capital inflow of multinational companies has accelerated the changes in the commodity structure of foreign trade in developing countries. After the war, developing countries introduced capital, technology and management experience from foreign companies and vigorously developed export processing industries, which enabled some industrial sectors to achieve technological leaps and promoted changes in the commodity structure of foreign trade and the development of the national economy. 3. The capital inflow of multinational companies promotes the formation and development of industrialization models and corresponding trade models in developing countries. After the war, developing countries used foreign capital, especially investment from multinational companies, to implement industrialization models and corresponding trade models, which can be roughly divided into three categories: primary product export industrialization, import substitution industrialization, and manufactured goods export substitution industrialization. stage. Import substitution industrialization refers to a country's policy of adopting strict import restriction measures such as tariffs, import quantity restrictions, and foreign exchange controls to restrict the import of certain important industrial products and support and protect the development of its own industrial sectors. The purpose of implementing this policy is to replace imported products with domestically produced industrial products to reduce the country's dependence on foreign markets and promote the development of national industry. Export substitution industrialization refers to a country taking various measures to promote the development of export-oriented industries, replacing traditional primary product exports with the export of industrial finished products and semi-manufactured products, and promoting the diversification and development of export products to increase foreign exchange earnings. , and promote the establishment of industrial system and sustained economic growth. Controlling trade in manufactured goods and raw materials Multinational corporations control the trade in many important manufactured goods and raw materials. More than 40% of the total sales of multinational companies and 49% of foreign sales are concentrated in four sectors: chemical industry, machine manufacturing, electronic industry and transportation equipment. Controlling international technology trade In the field of world technology development and technology trade, multinational companies, especially those from developed countries such as the United States, Japan, Germany, and the United Kingdom, play a pivotal role. Multinational corporations hold about 80% of the world's patent rights and basically monopolize international technology trade; in developed countries, about 90% of production technology and 75% of technology trade are controlled by the 500 largest multinational companies in these countries. . Many experts and scholars believe that multinational corporations are the main source of contemporary new technologies and the main organizers and promoters of technology trade. Western multinational companies manipulate technology transfer in three main ways: 1. Technology transfer from parent companies to foreign subsidiaries. In this transfer method, key technologies are still controlled by the parent company, but some technologies are transferred to foreign subsidiaries. In this way, the parent company can not only maintain its monopoly on technology, but also gain income and increase profits by selling technology and processes to subsidiaries. 2. The company transfers technology externally through technology licensing trade. Technology licensing trade in international trade mainly consists of three parts: first, the transfer of technology patent usage rights; second, the transfer of technical know-how; third, the sale and purchase of trademark usage rights. Through technology licensing trade, multinational companies help to enter into direct industries. Invest in markets and sectors that are inaccessible. 3. The company transfers technology to joint ventures. Multinational companies also provide technology transfer to their foreign joint ventures, so that they can not only obtain technology royalties, but also receive a share of the joint venture's profits, and even receive some preferential treatment from the host country. Sometimes, joint ventures formed between multinational companies and host countries themselves involve technology at a discount. Employment strategy regards talents as the first element. Thomas Peters, a well-known American scholar, believes that the only real resource of an enterprise or enterprise is people, and management is to fully develop human resources to do a good job. In the United States, the vice president of human resources of corporate companies has become an important member of the decision-making team, which illustrates the importance companies attach to talent and human resource management. In order to select available talents suitable for their own development, well-known multinational companies are often very ingenious in the recruitment and use of talents, and they recruit fresh talents one after another. Although the form and content are unique, their selection standards and employment philosophies are very similar. place.

Integrity and Quality This is a basic point and starting point for famous enterprises to employ people, and it is also the first principle. When famous companies hire employees, "integrity" is the most important thing. If the applicant's character does not meet the company's requirements, no matter how high the professional level is and how strong the work ability is, the company will not hire him. The famous IKEA company is particularly intolerant of deception. If they find that employees have intentionally deceived the company, they will be kicked out without mercy and will not give them a second chance. Team Spirit Many famous companies respect the management philosophy of "employees are partners" and "the company is a big family". They do not require employees to have strong personal abilities, but they must have team spirit and obey the interests of the team. They use corporate culture to tightly twist employees into a rope and hug them into a ball, becoming a sharp weapon in market competition. When McDonald's, the world's fast-food giant, recruits employees, it selects "middle-level talents" with ordinary looks and average education. After comprehensive training by the company and integrating with McDonald's corporate culture, they quickly become a firm member of McDonald's. Innovation *** Enterprise development must have an innovative spirit. Famous companies employ people not only to determine whether they are qualified for their current job, but more importantly, to have an innovative spirit. Microsoft would rather risk failure and hire someone who has failed than hire someone who is cautious but has no achievements. It is precisely with this sense of adventure and innovation that Microsoft has become the "Blue Giant" in the computer industry. Development potential Famous companies value diplomas, but not just diplomas, they value your future development potential. When Philips conducts business assessment of employees, in addition to business assessment, it also conducts potential assessment of employees, and then carries out targeted training and selection, so that employees feel more enthusiastic and motivated at Philips, work efficiency is greatly improved, and personal abilities are improved. Further enhancement has truly achieved the simultaneous development of employees and the enterprise. Learning ability Many well-known companies attach great importance to whether candidates have good learning ability and a strong desire for knowledge. Especially when recruiting fresh graduates, companies often focus on learning ability and curiosity. Many multinational companies say that the company does not care much about the gap between fresh graduates and company requirements because they are very confident in their training system. As long as they have a strong thirst for knowledge and learning ability, they can definitely stand out through systematic training. Therefore, this is a good choice in interviews. These two assessments are very critical. Degree of Integration During the recruitment process, companies often consider whether employees can recognize and adapt to the company's values ??and corporate culture, which will determine whether employees can serve the company well. For example, during the recruitment process, SONY takes employees' ability to adapt to Japanese culture, especially Sony's corporate culture, as a key assessment content. General Electric Co., Ltd. also looks at whether students like and agree with GE's values ??during recruitment, namely "insisting on integrity, focusing on performance, and eager for change." Leaders Promote from Within Many large companies prioritize talent development before college graduates choose careers, or even earlier. Most of these companies have established their own talent pools to conduct comprehensive analyzes on the performance, abilities and behaviors of new talents for future use. The talent pool has attracted thousands of talents of all types from all over the world. For example, Alcatel's talent pool has more than 4,000 people, including leaders and potential successors. These companies generally formulate succession plans for some key positions early to avoid taking action at the last minute and causing unnecessary losses. For example, French Liquid Gas Company conducts a comprehensive review of its "strategic positions" every one and a half years and selects six people as successors. The talents targeted by the talent pool, especially management talents, generally must have good business skills, strong abilities, and rich experience. Therefore, if you want to become a regional business leader or head of the trading department of these companies, it is not enough to have only professional talents. You must also highlight your rich experience and personality charm. The leader of a well-known British company said, "Ten years ago, it was very important to have a diploma from the Ecole Polytechnique in Paris, but today, the first thing is to have talent." In terms of leadership selection, 60% to 90% of leadership positions in many large companies are filled by internally promoted personnel, and they are gradually getting rid of their dependence on headhunting companies. The person in charge of DRH said: "Most of our leading cadres are selected from our own talent pool." Only a large number of long-term and stable talents can maintain relationships with partners. As companies grow, merge, and acquire, they also restructure their organizations so that their new leaders can adapt to new challenges.

In addition, the talent pool is ruthless in eliminating unqualified talents. Many people are defeated in the competition because the company says they need fresh blood. Talent localization strategy After China joins the WTO, with the development of the economy and the increase of national income, the labor costs of multinational companies will inevitably rise significantly. In addition, domestic companies are now beginning to pay attention to high wages and high benefits for their employees. Provide training to employees, etc. Faced with this trend, multinational companies have begun to re-examine their business strategies, that is, shifting from taking advantage of China's cheap labor force to taking advantage of China's large number of technical and management talents, thereby repositioning China as a research and development base and marketing center. In order to adapt to such a strategy, the focus of talent needs within multinational companies will shift from simple manufacturing workers to R&D personnel and senior managers. The first response of multinational companies such as Microsoft and Nokia to China's entry into the WTO was to strengthen their R&D capabilities in China and compete for technical and management talents. These large companies go to prestigious universities to recruit outstanding graduates, provide free air tickets to company inspections, and promise various training opportunities, which are manifestations of this awareness. The talent localization strategy of multinational companies not only includes the training of talent knowledge and abilities, but also includes the cultivation of employees' sense of belonging and loyalty to the enterprise. In addition to demanding generous salaries from multinational companies, local employees also pay more attention to the development of their personal careers, that is, whether the company can provide them with a stage to display their talents. In view of this, many companies in China have begun to send invitations to universities or training institutions to help them train senior talents, jointly organize MBA classes, etc. This shows that the past "superior" employment mentality of multinational companies has become more and more peaceful. .