Text 12. The Multinational Enterprise

Text 11. Globalization and National Sovereignty

A final concern voiced by critics of globalization is that in today's increasingly interdependent global economy, economic power is shifting away from national governments and toward supranational organizations such as the World Trade Organization, the European Union, and the United Nations. As perceived by critics, unelected bureaucrats are now able to impose policies on the democratically elected governments of nation-states, thereby undermining the sovereignty of those states. In this manner, claim critics, the national state's ability to control its own destiny is being limited.

Supporters of supranational organizations point out that in reality, the power of these bodies rests largely on their ability to persuade member states to follow a certain action. If these bodies fail to serve the collective interests of member states, those states will withdraw their support and the supranational organization will quickly collapse. In this view then, real power still resides with individual nation-states, not supranational organizations.

sss

1. In what way does globalization affect national economies?

2. Is national sovereignty hit in any way?

3. What is the place of supranational organizations in today’s globalized world?

A multinational company or enterprise is defined as an enterprise which owns or controls production or service facilities outside the country in which it is based. In other words, multinationals are not simply companies which trade abroad by exporting their products, they are companies which actually own (via a wholly or partly owned subsidiary), or control (via branch plant, joint venture, or minority interest), productive facilities in other countries. They have either acquired already existing foreign enterprises or have themselves built productive facilities abroad. We shall use the term ‘affiliates’ to refer to all types of ownership or control.

Multinationals normally have interests in at least four or five countries. However, definitions fail to give any real idea of the scope and diversity of multinational business enterprise; it covers everything from the thousands of medium-sized firms which have a few affiliates abroad, to the giant whose activities are the subject of international interest and concern. The trend towards globalisation of production by these companies has increased worldwide economic integration in much the same way as economies were integrated by trade in the past.

One of the most striking features of multinational companies is their size. The largest multinationals are huge business machines which have annual turnovers larger than the GDP of most of the countries in the developing world.

sss

1. What is a multinational company?

2. In what ways are they formed?

3. Define affiliate and subsidiary.

4. How big are multinationals?

[1] сокр. от Security Exchange Commission амер. Комиссия по ценным бумагам (создана актом Конгресса США в 1934 году в целях предотвращения повторений биржевых крахов, подобных обвалу 1929 года, вызвавшего Великую Депрессию; следит за соблюдением и вводит правила торговли на биржах США)

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