国际商务英语课文电子版lesson (4).doc

The term “economic globalization” is now being used with increasing frequency in newspapers, magazines, seminars and international conferences. With the basic feature of free flow of commodity, capital, technology, service, and information in the global context for optimized allocation, economic globalization is giving new impetus and providing opportunities to world economic development and meanwhile making the various economies more and more interdependent and interactive. Economy is not the only element involved in globalization since it also has an important bearing on politics, culture, value and way of life. While many people are acclaiming the benefits brought about by economic globalization, there are also loud voices of opposition, since different countries and peoples do not enjoy balanced benefits. Economic integration enables countries benefit from the boom （prosperity）of other countries but also makes them more vulnerable to the adverse events across the globe. Maybe we can say few topics are as controversial as globalization. But like it or not, it has become an objective trend in world economic development. The best policy for us is to follow the trend closely, availing the opportunities it offers to develop ourselves and avoiding its possible impacts.Such world organizations as the WTO, the World Bank and the International Monetary Fund which we shall discuss in later lessons, are, in a sense, champions (supporters) of economic globalization, while the multinational corporations are directly engaged in the trend and their operations constitute the major content of economic globalization. Some knowledge of the multinationals will help us gain a better understanding of the global trend.Before World War there were already a number of companies that would be described as multinationals. They were, however, comparatively small in number and scale (size). The first step in the internationalization of business after the War was simply a very rapid growth in fairly traditional terms, in the sense that more and more companies in one developed country set up their own, or bought over existing, manufacturing facilities in other countries.As development of such business activities grew rapidly, they had not only been variously (differently) defined in different studies, but also labeled with different names. However a typical multinational enterprise shall be defined as a business organization which owns （whether wholly or partly）, controls and manages assets, often including productive resources, in more that one country, through its member companies incorporated separately in each of these countries. Each member company is known as a multinational corporation. Each MNC is purported to represent certain interests （or to fulfill certain goals）of the multinational enterprise and is linked to one another within the organizational framework of the same multinational enterprise. If the MNC is the original investing corporation, it is known as the parent MNC, which is normally also the international headquarters of the MNE. If the MNC is established as a result of investments by the MNE, whether through the parent or through another of its already established MNC, it is an affiliate (subsidiary) MNC. An MNE may also have various regional or operational headquarters, in addition to its international headquarters.The multinationals have the following distinctive characteristics:Firstly, MNEs are generally enormous in size. For instance, General Electrics established in 1892 now has subsidiaries in over 100 countries and regions with more than 300,000 employees. In 2001 its business volume reached 126 billion US dollars. In China alone, it has 30 joint ventures or solely owned subsidiaries with over 8,000 employees. There is little doubt that the size of an MNE does indicate the amount of resources it controls even though the amount of resources located in particular countries may be small.Wide geographical spread is also characteristic of MNEs. (MNEs usually spread widely worldwide) Such geographical spread of MNEs enables them to have a wide range of options (choices) in terms of decisions in areas such as sourcing (get resource) and pricing (price fixing). They are also more able to take advantage of changes in the international economic environment. Such multi-nationality also enables MNEs to engage in worldwide integrated production and marketing giving rise to (leading to) extensive intra-MNE transactions which constitute a very significant proportion of total international trade.Another general characteristic of large MNEs is their longevity (long history) and rapid growth. Some MNEs have a history of many years and their double digit growth rate of revenue adjusted for inflation is higher than that of the GDP of many countriesThe behavior of MNEs is very much determined by their needs. These needs are often identified as goals. The purpose of organization is to facilitate the MNEs operations and the purpose of its operations is to achieve its organizational goals.Like most business organizations, MNEs are formed for profit. There is little doubt that the profit goal represents the basic need of the MNEs shareholders. It is also the need of all groups interested in the continued survival of the MNE. Yet this interest in the continued survival of the MNE expresses a second basic needthat of security.The importance of security to any MNE cannot be doubted. Profit is useless if it cannot be secured by the MNE and transferred wherever it so desires. Its assets and investments must be secured. A favorable business environment must also be secured. Without security, an MNEs survival can never be assured (guarantee). It is no wonder that MNEs have embarked on(carry out; start) policies to grow into gigantic sizes, to control resources, and production and manufacturing processes in many countries, and even to intervene in the affairs of government in both the home and host countries, in order to ensure the security of its profits, assets, organizations and operations. The need for security includes the security of profits in the short-and-long-run, the security of the MNEs assets and investment, and the security of other organizational needs, including a favorable business environment, the need for supplies of raw materials and other resource inputs for the production processes of the MNE, the need for effective organizational control and management, the need for transportation and communications, the need for technical improvements and the private needs of employees including managers.In our world today, the multinational enterprises are very important vehicles (means) for the transfer of resources across national boundaries. Given the organizational unity of parent and affiliates within such enterprise, and the fact that they are situated (located) in different countries, intra-organizational resource transfers between parent and affiliate or between affiliates of the same enterprise are also international transfers. Technology, capital and ready markets are sort of benefits MNEs bring to less developed host countries. The MNE is considered to be the most effective vehicle for the promotion of global economic development. Typical parent which controls the typical MNE is owned in the main (mainly) by the home countrys citizens or residents, in spite of the fact that the MNE is multinational in terms of the worldwide derivation of its profits, the high proportion of sales and investments in many foreign countries, the large numbers of employees in foreign affiliate MNCs and the multinational derivation of its finance. The absolute majority of the members of the board of directors also originate from (come from) the home country. Although the day-to-day running of corporate operations maybe decentralized to the affiliates, the major decisions, such as those on corporate goals, new investments and their location, are made by the parent company (or its regional headquarters in the case of very large MNEs).It is a fact that host governments can and do wield power over MNCs located within their territories. MNCs are under the legal jurisdiction of their host governments which can impose various rules, regulations, and laws on the MNCs to the extent of nationalizing all their assets.Multinational Corporations can be classified into four different types according to their organization and way of operation.The first type is called multi-domestic corporation that is a group of relatively independent subsidiaries. The parent company delegates sufficient power to each subsidiary to manage the production and marketing in the host country for the needs of local customers. This is a useful approach (method) when there are distinct (clear) differences in the specific conditions of host countries.The second type is the global corporations which operates under an opposite principle from the first type and views the world market as an integrated whole. Power and responsibility are concentrated at the headquarters that manages production and marketing