What Is A Transnational Organization
What Is A Transnational Organization
What Is A Transnational Organization
ORGANIZATION AND
TECHNOLOGY
Abstract
How does Multi/Transnational Organization and Technology facilitate Globalization?
What is a Transnational Organization?
One way that TNCs have spread Globalization is through Cheap International Marketing.
Wealthy TNCs often utilize the vast resources of people for cheap labour in LEDCs such as
China and other parts of Asia and Africa.
By investing in a developing country, a TNC is able to benefit from cheap labour as developing
countries usually do not have any form of national minimum wage. This means that the TNCs
costs are kept to a minimum thus creating productive efficiency. If costs are low, profit should
remain high which can then be used to reinvest into product innovation and new technology.
The aim of this investment is to crush all local and/or lesser companies, thus becoming the
dominant corporation.
Thanks to the intelligent investments TNCs make in LEDCs, some TNCs can become huge
(e.g. Nike, Adidas, Coca-Cola) and can even earn more money in a year than some countries.
Another way that TNCs spread Globalization is through the concept of the 'Uninformative
Product' which is where a company will release only one product, one after the other.
For example, Apple release the IPod Classic, then the IPod Nano, shuffle, IPhone, IPad etc.).
This means that everyone will desire the latest and the best product the company has to offer.
TNCs also spread Globalization by destroying local competitors in the LEDCs. Many companies
Will invest offices and factories in LEDCs and then, by attracting plenty but cheap labour,
quickly dominate and crush the lesser companies and businesses. This means less competition,
which equals more money, sales and success in the TNC.
Television
Internet
Billboards
Posters
Magazines