Peter Dicken 2015 Transnational Corporations The Primary Movers

© Peter Dicken 2015

Transnational Corporations: The Primary ‘Movers and Shapers’ of the Global Economy Global Shift Chapter 5

Review • Concepts to Review – – – FDI Global production networks (GPNs) Transportation and communication technologies Product life cycle Convergence and divergence • Key Words – Transnational corporations, uneven distribution of resources, geographical embeddedness, the internal geographies of TNCs, corporate restructuring

Nature of the TNC • Definition – ‘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’ – Two basic characteristics • They are networks within networks • Control and coordination is more complex than a domestic firm • The myth of the ‘global’ corporation • Geographical embeddedness • Connections to globalization

Development of TNCs • Product life cycle explanation • Strategy of beginning with a strong domestic position and then expanding geographically – links in with product life cycle new products thus reflect the domestic market, then move to other markets as the domestic market becomes saturated • Other evolutionary paths – Firms from small markets often set up overseas production facilities without using intermediaries – Acquisition of another domestic firm which already has foreign operations; virtually all TNCs include merger and acquisition as part of their development

Geography of TNCs • Forms of development – Bartlett and Ghoshal’s typology • ‘global product’, ‘worldwide geographical’ or ‘global grid’ or ‘global matrix’ structures – Firms combining traits to form integrated production networks • Convergence/divergence debate • Impact of locality

TNCs as Networks • Outsourcing • Types of production networks • Collaboration and competition • Corporate reorganization/restructuring • Re-shoring