CONTENTS
Introduction
Chapter I. Theoretical aspects of the multinational corporationfunctioning
1.1 Maintenance, structure and the basic types of activity of themultinational corporation
1.2 Advantages and disadvantages of politics of the multinationalcorporation
Chapter II. The role of the multinational corporation of the USA in theworld economy
2.1Theoperation of multinational corporations of the USA in Russian
Conclusion
Bibliography
Appendix
Introduction
The modern economy is moving towards the creation of uniform economicspace where the basic subjects of economic relations are no longer countries,but multinational companies and their alliances. Thus, the obvio
us trend totheir integration, to what the wave of the international mergers and absorptiontestifies is observed.
The basis of all multinational firms is made up of American companies.The number of workers and employees who are engaged in overseas branches isenough to tell that, is equal to half of American employees engaged in themanufacturing industry.
The international giants have deeply taken root into economic structureof developing states and it is, certainly, reflected in the strategy ofmultinational corporations. Owing to similar changes American multinationalcorporations bring certain corrective amendments to the strategy, but,nevertheless, constantly and purposefully export the working capital. So, thispractice deserves the closest attention with the purpose to work out effectiverecommendations to form domestic multinational corporations for furtherfunctioning in the world economy.
Chapter I. THEORETICAL ASPECTS OF FUNCTIONING AND DEVELOPMENTOF THE MULTIONATIOL CORPORATION
1.1 Maintenance, structureand the basic of activity of the multinational corporation
The process transnationalisation is characteristic for modern economy. Init the main characters are multinational corporations.
The organizational structure of multinational corporations, as a rule, isrepresented by the head company and its foreign branches.
The head parent company is an administrative center of the system ofenterprises of the multinational corporation. Its functions usually includedecision-making on merging with other companies, purchasing new firms; forminglong-term industrial, investment and financial politics of branches andcorporations as a whole; controlling the finance and research and developmentof foreign branches, at the same time the head company should enable managersof foreign branches to make decisions independently to satisfactory the demandsof consumers of the local market and according to the legislation of the hostcountry.
The basic organizational forms of foreign branches are:
- affiliated company (subsidiary)-a company which is controlled byanother one. The controlling company owns over 50% - and sometimes 100% - ofthe ordinary shares of the subsidiary;
- associated company (associate) - a company of which at least 20% andnot more than 50% the ordinary shares is held by another company;
- the branch (branch) - a part of a large organization that deals withone particular type of work.
The management of the multinational corporation solves problems ofperfection of structure of management depending on assortment of goods andservices, which they offer on the world market.
The example of an ideal structure of the multinational corporation is"General Electric", whose market capitalization in 2000 exceeded 300 billiondollars (the highest figure in the history of USA companies). It is one of themost versatile companies in the world; it offers a wide assortment of goods,including aviation engines, industrial plastic, lighting devices, powerinstallations and many other things in different regions.
Another example of American multinational corporations is "Ford" whichbegan its enterprise activity in Europe in the 60s on the basis of its branchin Great Britain. In the 90s this corporation carried out the development ofnew models, manufacture of components and assembly of machines in five Europeancountries, having united technological chains of factories of each of thesecountries in.
When trying to expend, the multinational corporation uses various formsof the world market. These forms are based on contract relations and are notconnected with participation in the share capital of other firms.
Thus, the modern multinational corporations are based on the theory of afirm in the organization of manufacture and selling of goods and services andthey have become the largest characters in the modern world economy.
1.2 Advantages and disadvantages of politics of themultinational corporation
Actively participating in the processes of international manufacture onthe basis of the traditional international division of labor, the multinationalcorporation has created its own intrafirm international manufacture on thebasis of modernized international division of labor, taking into accountdeveloping markets. This intrafirm variant of the international manufacture hasbecome the core of modern international corporations.
The organization of the intrafirm international manufacture gives themultinational corporation a number of advantages:
1)to usebenefits of the international specialization of manufacture in different countriesseparately;
2)to usetax, investment and other the privileges, given by countries to foreigninvestors as much as possible;
3) to maneuver loading of capacities, adapting the productionprograms according to the world market;
4) to use affiliated companies as a jumping-off place for furtherexpansion on developing markets.
Marking the advantages of functioning of the multinational corporation inthe system of the world economy, it is necessary to tell about their negativeinfluence on the economies of those countries in which they function. Expertsspecify:
- counteraction to economic policy of those countries, where themultinational corporation carries out its activity;
- infringement of the state laws.
- multinational corporations really remain a source of some the negativesocial consequences connected with egoistic motives of their activity.
Political and economic value of transnational corporations is so great,that in historically foreseeable time they will remain one of the importantfactors of influence strengthening of industrially developed countries in manyregions of the world.
ChapterII. The role of the multinational corporation of the USA in the world economy
2.1 The operation of multinational corporations of the USA inRussian
Russia is gradually transforming into the country for which the economyis characterized by greater liberalization, an open access for foreigncompanies to the majority of spheres of economic activities. In particular,large transnational corporations come to Russia, which economic activities havea global character.
The following companies - В«GeneralElectric В»,В« Westinghouse Electric В»,В« GEC-Alston В», etc. - While showing care,take steps to gain profit on newly created markets.
American automobile companies are also entering the markets of thecountries with transitive economy, by means of investments very cautiously. Thecompany "Ford" has been producing cars at a new assembly factory inPoland since autumn 1995, but the volumes of the assembly were small. Thecompany В«General MotorsВ» has created in Gilwice an assembly factory of familycars В«Opel AstraВ» from imported accessories. In Russia В«General MotorsВ» has setup organized a small manufacture (assembly) o...
