Text 3 Multinational Corporations: the Pros and Cons

Scan the text and find information on the following issues:

• The definition of an MNC;

• The steps a company evolves into an MNC;

• Glocalization.

The expansion of international business, particularly since the end of World War II, has resulted in the creation of a unique structure: the multinational corporations. A multinational corporation (MNC) or multinational enterprise (MNE) or transnational corporation (TNC) or multinational organization (MNO) is a corporation or enterprise that manages production establishments or delivers services in at least two countries. Its international operations contribute significantly to overall revenues and size. IBM, General Motors, General Electric Co., Coca-Cola, and scores of other giant companies are true multinationals.

A company usually evolves into a multinational over a period of time. First, it places more and more emphasis on exporting goods produced by its home factories. Then, it opens one or more foreign offices to allow for more aggressive marketing efforts. The offices may expand to include the production of goods. The company often buys foreign companies already in business producing the same or different kinds of products. Soon full-fledged multinational operations are under way.

Managing a truly global multinational company would be much simpler if it required only one set of corporate objectives, goals, policies, practices, products and services. But local differences often make this impossible. The conflict between globalization and localization has led to the invention of the word ‘glocalization’. The term first appeared in the late 1980s in the articles of Japanese economists in the Harvard Business Review. Glocalization means that the globalization of a product is more likely to succeed if the product or service is adapted specifically to each locality or culture it is marketed in. Yahoo is an example of a company that practices glocalization. It markets a portal that is viewed worldwide and offers different versions of its website for different users. The increasing presence of McDonald’s restaurants worldwide is an example of globalization too, while the restaurant chain’s menue changes in an attempt to appeal to local tastes are an example of glocalization. The aim of glocaliazation is to ensure a globalized world as a stable and integrated place as well as protecting the cultural heritage of local areas. Supporters often summarize the philosophy of glocalization with the slogan “Think locally, act globally”.

If you look at globalization as a dialogue between the global and local sectors, you get a good understanding of its challenges and potential benefits. With glocalzation, a global corporation’s goal isn’t to say. ”Here’s a sandwich. Rather, the corporation asks, “How can we make a sandwich you’d like?” When glocalization and culture connect, local communities play crucial roles in developing and sustaining global policies.

The multinationals are becoming more and more truly international. The great size and true international character of multinational corporations is bound to give them intentional influence in the political and economic affairs of the countries in which they operate.

WRITING

Read the text about Airbus Industrie and write its short summary. Mind that when you summarize something, you express the most important facts in a short and clear form.

Writing a summary involves:

• selecting the most important ideas or facts from a text;

• rewriting those ideas/facts in a short, concise form, using your own language;

• producing a text which is shorter than the original – usually at least half the number of words.