managing transnational corporations - prof. vikram tyagi prof. vikram s tyagi, jkbs1
TRANSCRIPT
Managing Transnational Corporations
- Prof. Vikram Tyagi
Prof. Vikram S Tyagi, JKBS 1
Prof. Vikram S Tyagi, JKBS 2
Managing Trannational Corporations
Course Introduction Definition and role in Globalized world
Strategic frame work for managing TNCs Major issues involved in managing TGCS
Strategy for managing TNCs Strategy, structure and operations
Pedagogy: PPT, Case Studies; class discussions
Reading references :1- International Business-The Challenges of Global Competition (Ed. 2009) -By Donald Ball, Wendell McCulloch, Michael Geringer, Michael Minor 2-International Business- Competing in the Global Marketplace (6th Ed. 2009} -By Charles Hill & A.K. Jain3- International Business-Environment and operation (12th Ed. 2010) -By John Danial, Lee Radebaugh, Daniel Sullivan and Prashant Salvan
Course facilitators:1-Harpreet; [email protected]; 95824269844 ;2-Navjot; [email protected] ; 98718228927; 3-Sweta;[email protected]; Mo: 9555782410 [email protected]; Mob: 9811809057
Managing Transnational Corporations
Method of Evaluation Class attendance -10 marks Class participation -10 marks (3 observers)
Group Assignment -20 marks Mid Term Exam. -20 marks Final Examination -40 Marks
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Managing Tranational Corporations
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What are Transnational Corporations A multinational corporation (MNC) or transnational
corporation (TNC), also called multinational enterprise (MNE), is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation.
The International Labour Organization (ILO) has defined an MNC as a corporation that has its management headquarters in one country, known as the home country, and operates in several other countries, known as host countries.
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Why Managing TNCs is different ?
More Complex Environment All the forces influencing the life and
development of the firm Domestic Foreign International
Forces External Forces (Uncontrollable) – Forces over which
management has no direct control Internal Forces (Controllable) – Forces that
management can use to adapt to external forces
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Why Managing TNCs is different ?
Domestic Environment All the uncontrollable forces in the home
country that surround and influence the firm’s life and development
Foreign Environment All the uncontrollable forces originating
outside the home country that surround and influence the firm different values Different political and legal systems difficult to assess
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Why Managing TNCs is different ?
International Environment Interaction between domestic and
foreign environmental forces or between sets of foreign environmental forces
Increased difficulty in decision-making
Decision making more complex
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Why Managing TNCs is different -External Forces contd..
Competitive Kind, number, location
Distributive For distributing goods and services
Economic GNP, unit labor cost, personal consumption
expenditure Socioeconomic
Characteristics of human population Financial
Interest rates, inflation rates, taxation
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Why Managing TNCs is different -External Forces
Legal Laws governing how international firms must operate
Physical Topography, climate, and natural resources
Political Forms of government, and international organizations
Sociocultural Attitudes, beliefs, and opinions
Labor Skills, attitudes of labor
Technological Equipment and skills that affect how resources are
converted to products
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Why Managing TNCs is different -Internal Forces
Factors of Production Capital, raw materials, and people
Activities of the organization Personnel, finance, production, and
marketing
Why Managing TNCs is different -Globalization
The shift toward a more integrated and interdependent world economy
Three components: The globalization of markets The globalization of production The globalization of services
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Why Managing TNCs is different -Globalization
Lowering of trade barriers made globalization possible; technology has made it a reality
Since the end of World War II the world has seen advances in Communication Information processing Transportation technology
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Global Institutions by purpose -Affecting TNCs
Global Natural Resources and sustainability- Affect TNCs Strategy
Location Topography -Mountains, desserts, bodies of water
Climate Sources of Energy Non-fuel Minerals Environmental sustainability
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Emerging Role of TNCs in world
There is an unprecedented transfer of power from people and their governments to global Institutions whose allegiance is to abstract free-market principle, and whose favoured citizens are soulless corporate entities
Foreign direct investment: at least 75% of world flows come from TNCs
International trade: 67% of all exports are directly related to TNCs through intra firm operations or trade with third parties
Some TNCs are bigger than some countries
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Emerging Role of TNCs in world-10 largest TNCs ($mn) -Nonfinancial
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Ranking Corporation Home Economy Foreign Assets Total Assets
1. General Electric United States 401 290 797 769
2. Royal Dutch Shell United Kingdom 222 324 282 401
3. Vodafone Group United Kingdom 201 570 218 955
4. BP United Kingdom 188 969 228 238
5. Toyota Motor Japan 169 569 296 249
6. ExxonMobil United States 161 245 228 052
7. Total France 141 442 164 662
8. E.On Germany 141 168 218 573
9.Électricité de France
France 133 698 278 759
10. ArcelorMittal Luxembourg 127 127 133 088
Emerging Role of TNCs in world
Top 50 Financial TNCs Top 100TNCs from Developing world Top 50 Financial TNCs ranked by
Geographical spread
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Growing Power of Indian TNCs
Some of Mega acquisitionsAcquiring Co Acquired Co Deal in $ bn
Tata Steel (2007) Corus 13.6
Vodafone (2007) Hutch Essar 10.9Bharati Airtel (2010) Zain Africa 10.7 Vedanta (2010) Cairn India 9.6 Hindalco (2207) Novelis 6.0 ONGC Imperial Energy 2.6Tata Motors Jaguar/Rover 2.3Jindal Steels El Mutun 2.3United Spirits Whyte&Mackay 1.2Essar Steel Agloma steels 1.5
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TNCs Management Business Model
Next Session
Please read case study:Evolution of Strategy at P&G
(c) Dr. Azhar Kazmi 2008 20
Managing Transnational Corporations
- Prof. Vikram Tyagi
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