The document discusses globalization and multinational corporations. It describes how globalization is driven by market, cost, government, and competitive factors. It also outlines the size and growth of multinational corporations, their diversity in terms of business models, locations, and organizational structures. The benefits and challenges of multinational investment for both host countries and corporations are presented.

1. Globalisation and Multinational Business

2. Globalisation: Setting the Scene Current issues in the global economy Defining globalisation global economic interdependence implications for business What is driving globalisation? market drivers cost drivers government drivers competitive drivers

3. The drivers of globalisation

4. The drivers of globalisation

5. The drivers of globalisation

6. The drivers of globalisation

7. The drivers of globalisation

8. The drivers of globalisation

9. Globalisation: Setting the Scene Current issues in the global economy Defining globalisation global economic interdependence implications for business What is driving globalisation? market drivers cost drivers government drivers competitive drivers Globalisation: the good and the bad

10. Multinational Corporations Statistics on growth and size of MNCs the comparative size of MNCs and countries' GDP

11. Comparison of the 10 largest multinational corporations (by gross revenue) and selected countries (by GDP): 2002

12. Multinational Corporations Statistics on growth and size of MNCs the comparative size of MNCs and countries' GDP foreign direct investment (FDI) inflows

13. FDI inflows ($ millions)

14. FDI inflows ($ millions)

15. FDI inflows ($ millions)

16. FDI inflows ($ millions)

17. FDI inflows FDI as % of gross fixed capital formation

18. FDI as % of gross fixed capital formation FDI inflows

19. FDI as % of gross fixed capital formation FDI inflows

20. Multinational Corporations Diversity among MNCs size the nature of the business overseas business relative to total business production locations ownership patterns organisational structure

21. Why do Businesses go Multinational? Categories of multinational organisation horizontally integrated vertically integrated conglomerate Advantages to firms r eductions in costs international differences in factor prices international differences in factor productivity low-cost access to local markets spreading overheads

22. Why do Businesses go Multinational? Advantages to firms (cont.) government support in host countries lower taxes subsidies provision of infrastructure increased demand spreading risks can exploit advantages over local firms ownership of superior technology entrepreneurial and managerial skills R&D capacity access to local technology

23. Why do Businesses go Multinational? The product life cycle and the MNC the launch phase the growth phase maturity late maturity and decline Problems facing multinationals language barriers selling and marketing relations with host governments relationships between subsidiaries

24. MNC Investment and the Host State Advantages of MNC investment employment balance of payments technology transfer tax revenues Disadvantages uncertainty power and control by the MNC over the host transfer pricing the environment

25. MNCs and Developing Countries The scale of MNC investment in developing countries Advantages to host country the saving gap the importance of development finance the contribution of saving to growth the foreign exchange gap public finance gap skills and technology gaps

26. MNCs and Developing Countries Disadvantages to host country MNCs may drive local firms out of business limited demand for local components repatriation of profits transfer pricing and effects on tax revenues competition between developing countries to attract MNCs distorting the whole pattern of development increasing gap between rich and poor introducing consumerist values What can developing countries do?

27. Globalisation and Multinational Corporations

28. Multinational Corporations Diversity among MNCs size the comparative size of MNCs and countries' GDP

29. Comparison of the 10 largest multinational corporations (by gross revenue) and selected countries (by GDP): 2002

30. Comparison of the 10 largest multinational corporations (by gross revenue) and selected countries (by GDP): 2002

31. Multinational Corporations Diversity among MNCs size the nature of the business

32. Multinational Corporations Diversity among MNCs size the nature of the business overseas business relative to total business

33. Multinational Corporations Diversity among MNCs size the nature of the business overseas business relative to total business production locations

34. Multinational Corporations Diversity among MNCs size the nature of the business overseas business relative to total business production locations ownership patterns

35. Multinational Corporations Diversity among MNCs size the nature of the business overseas business relative to total business production locations ownership patterns organisational structure

36. Multinational Corporations Diversity among MNCs size the nature of the business overseas business relative to total business production locations ownership patterns organisational structure Trends in multinational investment

37. Multinational Corporations Diversity among MNCs size the nature of the business overseas business relative to total business production locations ownership patterns organisational structure Trends in multinational investment the growth and geography of FDI

38. FDI inflows (% of gross fixed capital formation) FDI as % of gross fixed capital formation

39. FDI inflows (% of gross fixed capital formation) FDI as % of gross fixed capital formation Advanced countries

40. FDI inflows (% of gross fixed capital formation) FDI as % of gross fixed capital formation Advanced countries Developing countries

41. Multinational Corporations Diversity among MNCs size the nature of the business overseas business relative to total business production locations ownership patterns organisational structure Trends in multinational investment the growth and geography of FDI FDI and the UK

42. Direct investment into and out of the UK

43. Direct investment into and out of the UK Inward investment

44. Direct investment into and out of the UK Outward investment Inward investment

45. Types of multinational expansion horizontally integrated multinational vertically integrated multinational conglomerate Going global to reduce costs international differences in input prices international differences in productivity labour skills entrepreneurial and managerial skills learning by doing low-cost access to local markets economies of scale taking advantage of government policies Business Strategy in a Global Economy

46. Going global to access new markets increased demand spreading risks can exploit advantages over local firms ownership of superior technology entrepreneurial and managerial skills R&D capacity access to local technology learning from experience in diverse markets Business Strategy in a Global Economy

47. The product life cycle and the MNC the launch phase multinational spread likely to be limited the growth phase MNC likely to shift production abroad in order to retain cost competitiveness maturity MNC increasingly seeks markets abroad as growth in home market slows late maturity and decline MNC increasingly seeks both markets and ever lower cost production abroad Business Strategy in a Global Economy

48. Problems facing multinationals language barriers selling and marketing cultural issues relations with host governments relationships between subsidiaries possible diseconomies of scale easier if subsidiaries are run independently The global strategy trade-off economies of scale of standardisation or higher costs of customisation? determinants of trade-off Problems Facing Multinationals

49. MNC Investment and the Host State Advantages of MNC investment employment balance of payments technology transfer tax revenues Disadvantages uncertainty power and control by the MNC over the host transfer pricing the environment

50. Is Globalisation a 'Good Thing'? The benefits of globalisation benefits of trade benefits of increased FDI competition reduces costs and encourages innovation faster spread of technology political and social ties The costs can exacerbate inequality erodes national cultures environmental costs domination by MNCs