A large role in the modern economy is assigned to large international corporations. The largest of them have finances that exceed the national income of a number of states. The largest modern international corporation is Exxon Mobile. She owns 336 billion dollars.
For a fairly long time, according to the point of view of UN experts, formations with an annual turnover above $ 100,000,000 have been recognized by international economic corporations. They should have had at least 6 branches in different states. At the moment, the percentage of sales that are conducted outside the territory of the country of residence is taken into account. If this indicator is taken into account, Nestle will be recognized as the largest international multinational corporation. After all, 98% of its sales are carried out outside the residence.
In order for a company to be recognized as a modern international multinational corporation, it must possess a number of special features. So, it must necessarily have a direct impact on the development of the division of labor throughout the world. It is necessary that the branches are in different countries, and the subjects are represented by citizens of different states.
According to a rather paradoxical version, the predecessor of international companies and corporations was the Order of the Templars. He appeared in 1118. This opinion appeared because the Templars served as a bank, engaged in the implementation of international settlements. It was truly the largest organization.
A classic example of international national corporations, the East India Company, later emerged. It is noteworthy that there were two of them - one English and one Dutch. Representations later appeared in other countries. The emergence of international corporations of this kind dates back to the 17-18th centuries.
From the very beginning, these giant companies were distinguished by the fact that capital moved in them, regardless of the situation in the resident country. That is, their activities were independent.
They also engaged in production around the world, locating their branches everywhere. Foreign operations accounted for at least 25% of their total number. The staff was represented by many nations.
Companies of this kind are usually divided into four varieties. Firstly, these are multinational firms. Secondly, multinational. Also distinguish the international variety and the global one.
Multinational firms are a whole complex of enterprises of various kinds with a central office in the resident country and branches around the world. The owner is a representative in the resident country. The leadership in this case is centralized, but the share of independence and representative offices is also available, albeit provided in a limited manner.
A striking representative of such enterprises is the American Singer & Co. It was founded in 1851. At the same time, sewing machines of this company were sold most actively precisely abroad. As a result, the share of foreign sales exceeded the national one. The owner began to build factories in other countries, starting with Scotland. It is foreign operations that are the main factor determining the activity of a multinational company.
A multinational is called an international corporation, which brings together national enterprises of some countries. A classic example of this is Royal Dutch / Shell. The company was opened in 1907. It is important to consider that in the course of its activities an international corporation may well change, and it can be attributed to different types at different time periods.
An international company is a monopoly that has foreign assets. As a rule, trade is carried out outside the parent country.
With the development of international corporations, they began to distinguish one more type, the most modern - global. They appeared only at the end of the 20th century. As a rule, the largest manufacturers of automobiles and information are global, representatives of the banking and oil industries are found here. The term “global corporations” was first coined in 2006. This is what characterized enterprises that aimed at world-class production.
This variety includes firms that distribute their operations among branches located in different states. As a rule, these are network enterprises, they are connected with each other by a variety of agreements. Such giants have their own domestic market, their own corporate ethics. The global corporation includes enterprises in almost all countries of the world.
Thanks to the special structure, international corporations save on costs. They have qualified professionals around the world. Previously, state borders could hinder the growth of enterprises, but there are no such barriers to the development of international corporations. The founders stepped over them. The arena of activity of such giants is the world.
As a rule, international corporations attract the labor of foreigners. But most often this is done on a short-term basis. Foreigners are often attracted to carry out a specific project.
Integration in such firms can be horizontal. In this case, organizations in many states produce the same product line or provide the same services. For example, it was on this path that McDonald's took.
If the integration is vertical, an international corporation concentrates production in a limited number of states. However, the product is used during production in other institutions that are part of the giant. This is what Adidas does.
If a company is diversified, it means that it includes national institutions that have both vertical and horizontal integration. They are located in various states. This is the device of the world famous Microsoft company.
Reasons for the appearance
The main reason that provokes the emergence of such formations is the internationalization of production, its development to such an extent that it is necessary to push interstate borders. The expansion of production is carried out very actively, and it becomes necessary to turn national enterprises into transnational ones. The export of capital is the main factor in the emergence of international financial corporations.
The first such firms appeared in the most developed countries, when production began to cover neighboring, less successful countries. It was about finding cheap labor, access to new resources, and expansion.
The emergence of international financial corporations was also due to the fact that the owners at their opening have many advantages in trade. For example, barriers between states cease to be an obstacle; politics affects the activities of giants to a much lesser extent. For multinational companies, branches are an external springboard from which the capture of the domestic markets of new states takes place.
The next most important reason for the formation of such formations is the receipt of superprofits by the owners. The presence of competition has led firms to concentrate production along with capital throughout the world.
Initially, as a rule, companies leave the borders of one state, wanting to develop a new market. Thanks to the opening of branches, an important issue is being resolved: tariff and non-tariff restrictions are removed.
It would hardly have been possible to form transnational corporations without the participation and assistance of the state. It is they who are encouraged, as a rule, the actions of those who are on the verge of opening such a company. Registration of an international corporation is preceded by the conclusion of many agreements between different countries. Many countries have special support programs for companies that intend to enter the foreign market.
With the development of transport infrastructure around the world, new global enterprises are being created. The communication system is getting better, the export of capital is growing, and these factors are influencing the emergence of new international corporations.
Noteworthy is the fact that one fifth of all global enterprises in the world are in the United States. 91 of the 100 international corporations are Western European, Japanese and American. Thus, most of the capital is in the hands of these countries.
At the beginning of the 21st century, a new trend appeared - an increase in the number of largest enterprises in developing countries. So, the list of the largest international corporations in the world was supplemented by a Mexican company. In total, there are 6 Asian enterprises in the list of the 100 largest formations of this kind. The first international company from developing countries was on the list of the largest in 1995. It was a Korean company, Daewoo.
Structure by industry
About 65% of all multinational companies are engaged in production, 26% provide services, and 9% relate to the mining industry and agriculture. Statistics show that the share of enterprises operating in the service sector is steadily growing. At the same time, the share of mining is declining. The same trend is characteristic of agricultural firms.
It should be borne in mind that transnational corporations very significantly affect the world order. And they have both disadvantages and advantages for the development of the global economy. For example, these giants help distribute resources more efficiently between different states. They also help to disseminate the latest services, products in various countries, increase competition, which leads to new innovations, and consequently, the faster development of mankind.
Sometimes international corporations are involved in the fight against the corruption component of society. This makes competition even more effective. However, regarding this item, experts express several points of view. So, in the Royal Dutch / Shell Code, it means that the firm will never take part in corruption cases.
At the same time, such a large-scale phenomenon could not but have a negative impact on the situation in the world. Since global organizations have the strongest effect on the world around them, their positive and negative effects are manifested quite clearly.
For example, international corporations intervene in industries that were initially considered state-owned. This is considered a drawback, since large organizations of this kind are able to counteract the effective state policy in the field of economics for their interests. Multinational corporations are also able to quickly suppress novice competitors, having leverage over the country's policies. And the presence of global firms sometimes leads to the fact that the host country suffers serious losses.
Transnational corporations are largely free and independent, they are able to violate official laws. It is usually not difficult for affiliates to circumvent legal norms and conceal real income in order to get rid of the tax burden. And then the host state suffers from a budget shortage, because less and less funds go to the treasury. Moreover, an international corporation is capable of being a monopoly, setting excessively high prices, it has a strong influence, and often such a formation infringes on the interests of states.
As a rule, large enterprises of this kind do not seek to take care of the environment and labor resources of the country in which they open a branch. Often they harm the environment in the host state, create conditions for the deterioration of working conditions. Some use child and female labor prohibited in civilized countries during their production.
World Giants List
It is noteworthy that at the moment almost everything from the basket of a typical consumer is made by only a dozen international corporations. Whatever a person buys - Mars chocolate, Bounty, Sprite and dozens of varieties of drinks, coffee, profit goes to the same largest formation.
Approximately 35% of the global processed cheese market is occupied by products of the company Kraft Foods, founded in 1903. This is the second largest packaged food company. It is represented in 155 states. In the Russian Federation, the company's products are represented by the brands "Air", Jacobs, Alpen Gold, Estrella and a dozen others known to all.
The name of this international corporation is associated with the biggest scandal of recent years. So, in China in 2008, approximately 54,000 children were seriously ill, some of them died due to the use of products of this brand. Melamine was found in many batches. After this incident, a number of brands from this company were discontinued.
Founded in 1866, Nestle has also become a leader in the food and pharmaceutical market. The annual turnover as of 2011 was approximately 68 billion euros. In Russia, the company is represented by the following brands: Bon Paris, Russia is a generous soul, Purina ONE, Nesquik and many other well-known brands.
The scandal associated with this transnational corporation flared up in the 80s of the 20th century. Then the company established sales of baby food in developing countries. These were food mixtures, the use of which at the termination of breastfeeding and their use led to the fact that the mother was deprived of milk.
Thanks to this, the acquisition of mixtures became a necessity for many mothers. Since nutrition instructions were given exclusively in English, in third world countries where there was no high-quality water, mothers diluted mixtures in dirty water. And this quickly led to the death of the baby. As a result, protests broke out.
Another undoubted leader in the global market is the company Procter & Gamble, opened in 1837. At the moment, all the products of Myth, Tide, Naturella, Head and Shoulders, Max Factor, Duracell batteries and dozens of other brands belong to this giant, which was once a small company opened by soap makers. It is believed that this corporation is guilty of draining vast areas of swamps and burning many forests due to the creation of palm plantations. After all, it is from palm oil that many of the company's products are created. In 2007, melamine was discovered in feed from this company, due to which thousands of dogs and cats in the United States died. It would also be a huge scandal. It should be noted that the company conducted a serious investigation by publishing the results of the examination. An active campaign is being conducted against the company because of the experiments it conducts on animals.