management+of+transnational+corporations



=**Transnational Corporations**=

Transnational corporations or multinational corporations are companies or enterprises that manage production and deliver services in more than one country. They have their headquarter in one country, while having smaller companies in their corporations operate in other countries. Critics argue that these corporations does not display loyalty toward the countries that corporate with them, but only to act in their best interest. Since 1950, many have raised debates and questions about transnational corporations because of their economics and political power, also with the complexity of their buisiness.
 * Background**

The early companies that apply this system is the Knight Templar, who are infamous for their banking services across Europe, date back in the 12th century. The Dutch East India Company is also one of these companies. Many large transnational corporations have budget so great that it even exceeds some country GDP. They have a powerful influence in the local government and economics as well as the world's, as well as play an important role in international relations and globalisation.

The structure of a transnational corporation can be divded into 3 categories:
 * Structure**

__Horizontally Intergrated Companies:__ manages the establishment of the production in different countries to make the same products.

__Vertically Intergrated Companies:__ manages the establishment of the production in certain countries to make products that serves as an input to the production establishment in thoes countries

__Diverse Intergrated Companies:__ manages the establishment of the production in different countries that does not operates in horizontal nor vertical fashion.

There are many motives for these corporation to expand their presences on other countries, one of which is the desire for growth. A corporation that have reach their limits in domestic demands will want to increase it by little additional growth. Foreign market may provide opportunities for new growth.

Another motive would likely to be preventing competition. The safest method to eliminate potential or actual competition from other foreign business is to go and get those businesses before anybody else do. Plus, by operating the company in another country, these corporations can reduce the cost since they can use cheap foreign labour forces in developing countries.

__Ethical__: Since many transnational corporation have a larger income than the country which are incorporate. This means that it's not easy for local governments to apply national laws upon these corporations.
 * Social & Ethical Issues**

__Social:__ Host countries will benefit from these foreign investment, including the training of local workers in new and potential skills required. Advance technology will be brought to the country and the local community can also benefit since land would be develop; roads will be built, improved transportation.