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    28 views17 pages

    The Rise of The Global Corporation

    Uploaded by

    Arjay Flores

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    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 17
    THE HISTORIC RISE OF THE GLOBAL CORPORATION — THREE PERIODS AS indicated throughout this text, global cor- Porstions are inseparable from the more general phenomenon of globalization itself ‘i follows that how one identifies globaliza- tion serves to ‘locate’ global corporations, both in the complex interactive pattem defined by globalization and within given historical periods. This chapter situates the global corporation in three broad historical Periods, of which the last two have become. ‘the most relevast ‘The approach to the study of globalization sometimes termed ‘historical globalization’ locates the phenomenon itself in early patterns of tade and exchange (Bentley, 2003; Gills and Thompson, 2006; Moore and Lewis, 2000), Ineatly historical periods as both cities ‘and countries extended their reach beyond their on borders, this view holds, a fonm of globalization was initiated which then fol- lowed complex patterns of interactive engage- ments organized through trade and directly indented by the emergent and subsequently The Rise of the Global ea se: Corporation Deane Neubauer The so-called ‘developing écotiomies", and « ‘especially those of Brazil, India and China - the so-called BRICS economies ~ have become the, most dynamic sector of giobel corporate grow, represented in part by their significant FDI over three decades. While the {otal of FDI flows is afl ess than that which passes between fully developed counties, Table 17.1 demonstrates the rapidity of capi tal flows to developing counties: The relative size, growtti and range of activity of global, corporations fiom the emerging eonomies suggest thet they are on a trajectory that will soon situate them firmly within those of the historically more developed economies. The number of slobal corporations from the emerging may- ket economies listed in the Fortune Global 500, which ranks corporations by revenue, ‘ose from 47 firms in 2005 10°95 in 2010, Table 17.1 Type of flows These companies have also’ become active in the broad pattem of global mergers and acquisitions (M&A), «primary vehicle by Which comporate concentration takes place. Torcite‘Abem: In 2010 these companies, accounted! for 2.447 ecauislons oF 22% a global MBA tiantctions, ‘hich sup rom 661 acaustions, or 9% of otal MBA acaustions a 2001. OF fe ,113 Maa deals anncuteed in 2000.5.623' (S050) mohed emerging market companies, either af byes o> 5 take-over targets of MNCS in aavascee cour, es, (Ahern, 2011: 23) i ‘The fact that the global! economic slowdown zesulting from the financial erisis 62007 has fad Neser impact on, many: developing economies, especially the BRICS, indicates tie-extent to which they have beconte a new and important souree of eapital within the + global system.) Capital ows in genetal over the! past ‘decade-and-a-bslf' ave) begun 10" change from the dominant north-north north-south ynamic to one in which south-south and south-south capital flows are. significant Rajan, 2010) with most of the south-norh capital flows.coming from China aid India Examples include China’s Lenovo corpora tion's purchase of IBM's PC business and India’s investment in various historically British firms including Jaguar Land Rover (Economist, 2011). Increased north-south investments during this period allowed global north corporations to rebound quickiy fom their profit losses and restore income growth. The relative robust nature of the Capital flows to developing countries, 2005-10 (son) 2005) 2006 2007 2008 20082010 iat a come fo 32. a5 Porto investment 158 268 sn 82 507 561 334 any 2 195 Other investmnent® 3 28 686 39 56 38, {ota inerenents inde lan om cma bank acl bans ad tad onda Sore: WCA0 011, 27a THE SAGE HANDBOOK OF GLOBALIZATION emerging economies has’ continued to attract FDI and to eréate conditions leading to the rapid expansion of their nationally based global corporations (UNCTAD-WIR, 2011: 26). China is the largest developing country outward investor with estimated holdings in 2009 of approximately USS1 trillion (OECD, 2010). The differential impact of such emergent global dynamics has moved some observers to suggest that ‘our previous distinctions between global north and south are no longer adequate to suggest the overall dynamics of growth and inactions within the global system, Wolfsen- sokn, for example, has'stggested a charac- terization tit he terms ‘a four-speed world’ that differentiates counties as Affluent, Con- ‘verging, Struggling and Poor, with the BRICS dominating the growth of the convergent group (Wotfsensohn, 2007). The importance of global corporations in Brazil, India and China to the current acd projected global economy is singular. With 40 per ceat of the world’s population the BRICS represent a primary force in both global production end’ consimption. Hawksworth and. Cookson predict’ that “iniddle class’ consumers in China and India ‘will grow from some.1.8 billion in 2010 to 3.2 billion in 2020 and 4.9 billion by 2030 (Hawksworth and Cookson, 2008): The rel- ative import of their global corporate cul- tures can be gauged in part by the fact that in 2012 global comporations in China made up 73 of the largest in the Fortune 500 list (CNN Money, 2012), and whereas Brazil and India with eight apiece currently account for a small shaie of such corpora- sions, emergent market countries are\pro- Jjected to account fore near doubling of their share of wotld trade over the next 40 years, reaching neatly 70 per cent by 2080 (Ahern, 2011), In 1998 only one of the top 100 global corporations was located outside the ‘United States, Europe or Japan (Oatley, 2008). Rising global corporations in the BRICS ae joined by emergent large compenies in other developing economies throughout the ‘world such as Malaysia, Mexico, Russia, ‘Turkey and Vietnam, Thé following list sug- gests some exemplary cases exploring 2008 data, % Emerging Market Global. Corporations ite Basic: Element ‘uss i isa word. leader In alumina production + Bhert Forge (nda) sone of the wa’ lergest, forging companits aa ‘+BY Compa (ina) 8th wit ares fan facture ofncke-cadmiui batts + CEMEK (Mexico) has developed into one ofthe ‘world’ lamest cement producers + Ching Intemational Masine.Contziners Group (China) 8 the wore lagedt, anulacer of shippit containers i ++ "Cosco Grbnp (Chia) one oF th largest ship- png compares nthe wr + Embraer (Braz) has:- suppbsded Canada’s Bombardier as the market leader in regional jes +» Galanz Group (China) Rasa 45 percent share of the European and a 25 per cent share of the US rmicrowaverattat + Hisense (China) is, the number one supplier of flat panel 1¥5 to France + Johnéon Electric (Chia) is the 'Wotl' leading imanufactre of rl elec motors + Netiak (Mex) is oe of the wort’ lacing “ares nt Reda 6 cn or the automotive industry ‘+ Sistema (Russia) sa conglomerate ith focus on telecomminicatons ‘+ Tata Chemicals (nda) an inrganicchemicals producer mth a significant olbal markt share of soda ash + _TechtonicIndusties Company is the number supplier of power tools to Home Depot + _ Wire (ea) is. the work's arestthic-perty engin Pies lee coripae (The Boston

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