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E&MoMNEs > 2. What are MNEs? > Flashcards

2. What are MNEs? Flashcards

1
Q

Tangled Webs: Unravelling Complexity In The Global Economy

Key words: Global production networks, financialization, transnational corporations, processes of globalization, connectivity, complexity, geographical clusters

A

…

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2
Q

A simplified analytical framework of the global economy

-> Folie 3 ansehen und beschriften

A

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3
Q

Global Production
Networks (GPNs)

GNPs are networks which are ?(1)? and ?(2)? across national boundaries rather than actually spanning the whole world.

A

(1) geographically extensive

(2) functionally integrated

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4
Q

Traits (Eigenschaften) of Global Production Networks (GPNs): ?? (4)

A

Turning inputs into outputs through production circuits

Unevenness of power relations

Involved in both cooperation and competition at the same time

Integrate firms into structures which blur traditional organizational boundaries (Deutsch: Integration von Unternehmen in Strukturen, die die traditionellen Organisationsgrenzen verwischen)

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5
Q

What are the basic components of a production circuits? (4)

A

Inputs (of materials and non-materials)

<–>

Transformation (of inputs into semi-finished or finished goods or services)

<–>

Distribution (of the goods or services)

<–>

Consumption (of the goods and services)

(
–> : Flow of materials and products
<– : Flows of information
)

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6
Q

The basic components of a production circuits

Welche Inputs treten entlang von Produktionskreisläufen auf? (4)

A

Technology Inputs (Research, design, quality control, product and process technologies)

Energy Inputs (Electricity, oil, coal, gas, nuclear and renewables)

Service Inputs (Procurement, accountancy, insurance, human resources, legal, advertising, marketing, sales, maintenance)

Logistical Inputs (Coordination of supply chains, movement of materials, products, people and information)

–> Abbildung Folie 6!

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7
Q

The basic components of a product circuits

Folie 7 ansehen !!!

A

…

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8
Q

Who are the actors of Globalization? (5)

A

Transnational Corporations

States

Civil Society Organizations

Labour

Consumers

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9
Q

Major actor-centred networks in the global economy

–> Abb Folie 9 !

A

…

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10
Q

What are Transnational Corporations?

A

= firms with the power to coordinate and control operations in more than one country, even if they do not own them

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11
Q

firms with the power to coordinate and control operations in more than one country, even if they do not own them

Definition of what?

A

Transnational Corporations

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12
Q

Transnational Corporation

The firm owns the activity across the globe

What mode does the firm follow?

A

equity mode

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13
Q

Transnational Corporation

The firm do not own the activity but it is made by independent firms across the globe.

What mode does the firm follow?

A

non-equity mode

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14
Q

A Transnational Corporation has the ability to coordinate and control different processes and transactions.

True/False?

A

True

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15
Q

Transnational Corporations take advantages of ?? differences

A

geographical

-> i.e. factor of production, state policies

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16
Q

Transnational Corporations have the ability to change location according to international events.

True/False?

A

True

-> geographical flexibility

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17
Q

Transnational Corporation

The coordination process depends on what?

A

the boundary of the TNC

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18
Q

Transnational Corporation

The coordination process depends on the boundary of the TNC:

  • The boundary is the property of the firm
  • any activity can be ?(1)? or ?(2)?
A

(1) internalized (=made inside the firm)

(2) externalized (= made by somebody else via contractual arrangements)

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19
Q

Transnational Corporation

Any activity can be internalized (= made inside the firm) or externalized (= made by somebody else via contractual arrangements)

1) Internalized transaction when?

2) Externalized transaction when?

A

1) when all the activities are internalized

2) when all the activities are externalized

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20
Q

Transnational Corporation

Power relationship highly influence firms’ network shape. Some actors can have more power over others.

A

…

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21
Q

The Role of State

Nation-state is the most important bounded territory, but to follow a global rule is not possible –> MNE’s subsidiaries are bounded to ??
-> political structure of that state influence economics relationships

A

national law

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22
Q

The Role of State

Taxes and incentives überarbeiten

A

…

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23
Q

Minimum Global Tax for MNEs

A

https://www.oecd.org/tax/beps/statement-on-a-two-pillar-solution-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the-economy-october-2021.htm

https://www.youtube.com/watch?v=aj2zymlPqow

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24
Q

The triangular nexus of relationships between firms and states

-> Folie 16!!

A

…

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25
Q

Knowledge

Workers embody the knowledge.

each products needs direct or indirect workers for its production process

Mobility of workers is limited according to their culture but they have freewill to decide where to go

A

…

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26
Q

Consumers

Consumptions change according to the sector

B2B = Consumers of inntermediary goods

B2C = Consumers of finished goods

Influenced by: ?? (3)

A

Income

Social and Cultural process (i.e. fashion)

Role of Marketing Managers

27
Q

Apple is 8th (500 Fortune List)

-> Folie 19

A

…

28
Q

Global civil society organizations

-> read slide 20 !!

A

…

29
Q

Geography Clusters

Generalized clusters reflect what?

A

the agglomeration of people due to common human activities (i.e. commuters, communities)

(Deepl: Allgemeine Cluster spiegeln die Agglomeration von Menschen aufgrund gemeinsamer menschlicher Aktivitäten wider (z. B. Pendler, Gemeinden) -> Agglomeration: räumliche Ansammlung)

30
Q

Geography Clusters

Specialized clusters reflect what?

A

the specificity of a firm to agglomerate to other firms for leveraging economies of scale (so called industrial district)

(Spezialisierte Cluster spiegeln die Besonderheit eines Unternehmens wider, sich mit anderen Unternehmen zusammenzuschließen, um Größenvorteile zu nutzen (so genannte Industriegebiete).)

31
Q

Modern slavery is a widespread global issue that does not have one clear universal definition

True/False

A

True

32
Q

Modern slavery includes practices such as forced labour, human trafficking, servitude slavery, child labour and forced marriage

Source: Anti-Slavery International

A

…

33
Q

How many people are victims of modern slavery worldwide?

A

40,3 million (estimated)

34
Q

How much money is forced labour generating globally?

A

annual profits of over $150 billion (USD)

Source: International Labour Office

35
Q

Networks of Networks

Global economy should be seen as a grounded network of: ?(1)?, ?(2)? and ?(3)? networks

A

(1) organizational

(2) geographical

(3) production

36
Q

Networks of Networks

Organizational networks = production circuits and networks

Geographical networks = localized clusters of economic activities

production networks = nexus of interconnected functions and operations through which goods and services are produced and distributed

A

…

37
Q

Interconnecting dimensions in a globalizing economy

Name 3 dimensions!

A

(a) the ‘vertical’ dimension
-> Global production networks (individual manufacturing and service sectors)

(b) the ‘horizontal’ dimension
-> Territorial systems at different geographical scales (Nation, Local community, Region)

(c) the ‘global’ system
-> Global production networks (Territorial systems)
–> vereint vertikale und horizontale Dimension (!)

Folie 24!

38
Q

Transnational Corporations: The Primary ‘Movers and Shapers’ of the Global Economy

A

…

39
Q

Nature of the TNC

What is a transnational corporation (TNC)? (Definition)

A

A transnational corporation is a firm that has the power to coordinate and control operations in more than one country, even if it does not own them.

40
Q

Name two basic characteristics of TNCs

A

they are networks within networks

control and coordination is more complex than a domestic firm

41
Q

Firms are going abroad for what?

A

Market seeking (Size)

Internal Structure

Accessibility (of some resources)

Asset Seeking (Knowledge, Labour, Costs)

42
Q

New MNEs

  • Latecomers
  • Newcomers
  • Born Global (e.g. Zara)
A

…

43
Q

Usually there is an Evolution of TNCs

Diverse pathways of TNC evolution

-> slide 30 ansehen !!!!!!!!!

A

…

44
Q

A global integration-local responsiveness framework

-> Folie 31!!

A

…

45
Q

A global integration-local responsiveness framework

Name Pressures for global strategic co-ordination! (7)

A

Importance of multinational customers

Presence of multinational competitors

Investment intensity

Technology intensity

Pressure for cost reduction

Universal needs

Access to raw materials and energy

46
Q

A global integration-local responsiveness framework

Name pressures for local responsiveness! (5)

A

Differences in consumer needs

Differences in distribution channels

Availability of substitutes and the need to adapt

market structure

host government demands

47
Q

Multinational corporation (MNC) = multinational enterprise (MNE) = transnational enterprise (TNE) = transnational corporation (TNC) = international corporation

(Wikipedia)

A

…

48
Q

TNCs as networks within networks

-> slide 32 ansehen !!!

A

…

49
Q

TNCs = MNEs

True / False?

A

True

50
Q

?? are networks within networks, structured through a myriad of complex relationships, transactions, exchanges and interactions within their own internal corporate network and between that network and those of the other key actors with whom ??must interact.

A

TNCs

51
Q

Why is it vastly more complex to coordinate and controle the internal and external networked activities of a TNC’s networks in comparison to a purely domestic firm?

A

Because TNC’s networks are spread across, and embedded within different national jurisdictions and contexts

52
Q

Configuring the TNC’s international networks

When growth occurs, any organism (or organization) has to change
-> Change in ?(1)? becoming more specialized
-> Increase ?(2)? in the links with other functions

Not adding function but becoming more ?(3)?

A

(1) functional role

(2) complexity

(3) product oriented

53
Q

Types of TNC organizational architecture

Name the 4

A

a) Product division structure with seperate international division

b) Global product division structure

c) Global geographical division structure

d) Simplified global matrix structure

-> Folie 35 ansehen!!!!!!!!!
-> Struktur den Schaubildern zuordnen und verstehen

54
Q

Name 4 model of organization!

A

Multinational organization

International organization

Global organization

Matrix or Integrated network model

55
Q

decentralize operations in response to national market differences

Which model of organization ist it?

A

= multinational organization

56
Q

capitalize firm-specific assets of technological leadership or marketing power

Which model of organization ist it?

A

International organization

57
Q

All assets are centralized, the HQ coordinates policies and actions of subsidiaries

Which model of organization ist it?

A

= global organization

58
Q

flexible network for orchestrating production, inbound and outbound logistics, services etc.

Which model of organization ist it?

A

= matrix or integrated network model

59
Q

HQs and subsidiary relationships

name 3 different types?

A

The local implementer

The specialized contributor

The world mandate

60
Q

HQs and subsidiary relationships

The local implementer has limited ?(1)? and ?(2)?.

A

(1) geographical scope

(2) functions

61
Q

HQs and subsidiary relationships

The specialized contributor: specific expertise tightly integrated into the activities of other subsidiaries in the TNC.

Narrow range of ?(1)? and a high level of ?(2)? with other parts of the firm.

A

(1) functions

(2) interdependence

62
Q

HQs and subsidiary relationships

The world mandate:
worldwide (or possibly regional) responsibility for what?

A

a particular product or type of business

63
Q

The Nutella global value chain

-> Folie 38!!

A

…

64
Q

Concepts to Review:
- FDI
- Global production networks (GPNs)
- Equity and Non-equity
- actors
- role of states
- MNEs configuration

A

…

E&MoMNEs (3 decks)

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