TNCs in the economy. TNCs are ...

Among the hundreds of the largest economies in the world, 52 are transnational corporations, and 48 are states. Today corporations rule the world. The political lobbying and global influence of TNCs on the economies of many states is so great that they set the rules of the game not only for competitors, but for whole states.

TNCs are an economy comparable to the size of a single country. Some corporations can rightfully be called state-forming, as they create millions of jobs and have incomes that exceed the GDP of many countries in the world.

What are TNCs?

TNCs are firms that have controlled assets in several countries and operate far beyond their home country. UN experts studying international corporations since the 1960s identified three characteristics characteristic of transnational corporations:

• The corporation takes decisions through one management center, pursues a coherent policy and implements a unified strategy;
• It has, as part of a unit, located in two or more countries, the legal form and field of activity of which may be diverse;
• Individual units in the company are interrelated, affect each other's activities, share knowledge, resources and responsibility.

Global corporations

TNCs are 2/3 of foreign trade, almost half of industrial production, up to 80% of technological innovations. It is quite natural that a significant share of goods on the market (25%) is produced by several transnational corporations. For example, the company Nestle sells cosmetics L'Oreal and jeans Diesel. A wide range of products, from soap Dove to chocolate Klondike, belongs to the company Unilever.

Up to 1/3 of the output of international corporations refers to the production of foreign structures in TNCs, the sales volume that has already exceeded world exports. American and foreign TNCs carry out 50% of export operations in the United States. In the UK exports, corporations account for up to 80%, and in Singapore exports - up to 90%.

First international companies

The first international organization, a number of researchers believe the Knights Templar, founded in the XII century and leading, among other things, international financial activities. The very first TNCs are the British East India and the Dutch East India Company, founded in 1600 and 1602 respectively. The Dutch company was also the first joint-stock company. Megacorporations of the 17th century already had powers at the state level, waged military actions, minted coins, created colonies and took part in resolving questions of high politics.

Transnational corporations in a more modern form arose in the second half of the XIX century and produced and sold minerals. In the twentieth century, their sphere of activity expanded considerably, reaching a global scale thanks to the development of cooperation and the universal division of labor. Specialization of production contributed to an increase in its volume.

TNCs and MNCs

By nationality, large corporations are usually divided into transnational (TNC) and multinational firms (MNCs).

• TNK is a corporation with foreign assets, leading production and sales activities outside the borders of the "native" country (where their headquarters are located). In the United States, a corporation is most often meant as a joint stock company, and since many modern multinationals have emerged as a result of international American expansion, the term has become their name. TNCs operate in different countries through branches, subsidiaries and other forms of organizations. The departments have practically independent production and marketing units, carry out research and development, etc. In general, the branches represent a huge production complex. Shares of the company, as a rule, belong only to representatives of the country-founder.
• MNCs are multinational firms, business associations from different countries on a production and scientific and technical basis. Their distinguishing features are: multinational share capital and a multinational leading core. Most modern TNCs are of the first type, since they are managed by representatives of one state. Multinational firms are not so many. For example, the Anglo-Dutch oil refining concern Royal Dutch Shell and chemical concern Unilever.

In a separate group, it is possible to take out international cooperative unions, consortiums created to solve certain tasks.

Classification of corporations

Depending on the scale of activity and annual turnover, small TNCs (3-4 foreign branches) and large TNCs (dozens and hundreds of branches in different countries) are singled out.

• TNCs with horizontal integration have units in several countries and produce basically the same or similar products (for example, US car companies or the "fast food" system).
• TNCs with vertical integration combine branches with one owner, responsible for all stages of production of the final product, supplied to the units of the same company, located in other countries.
• Separate (diversified) TNCs are enterprises that produce a variety of products: from food to cosmetics. They are managed by units located in different countries, not combined horizontally or vertically.

A special type of TNCs are transnational banks (TNBs), which lend to business and organize international monetary settlements. Having dominated the state and international financial markets, they can have a serious impact on the mutual parity of national currencies.

Markets

Transnational corporations account for half of all industrial production in the world, 70% of world trade, 40% of which is the domestic trade of individual TNCs. Many transnational corporations operate in the oil, chemical industry, automotive, electronics. In these areas, it is quite easy and profitable to create international production associations. TNCs are monopolies in many industries that take control of world markets:

• On 90% wheat, corn, coffee, tobacco, timber, iron ore market;
• 85% of the bauxite and copper mining market;
• 80% of the tea market and the tin mining market;
• 75% - oil, rubber and banana market.

TNK is an enterprise that does not always deal only with production, such as Siemens, such as international banks, pension and investment funds, audit and insurance companies.

TNK Ratings

The rating of global global giants from 62 countries that set the tone for the world economy was published in the American magazine Forbes. It included 515 TNCs from the United States, 210 Japanese, 113 Chinese, 56 Indian, 62 Canadian corporations. The first place was received by the American bank JP Morgan Chase. The remaining seats in the top five were shared by General Electric, Bank of America, Exxon Mobil and ICBC.

The second most important ranking was the ranking of the Partnership for a New American Economy. The list is headed by the retail network Wal-Mart Stores from the United States, whose consolidated revenue is comparable to that of Germany. The second and third places were awarded to Royal Dutch Shell from Holland and Exxon Mobil. High ratings went to Apple, AT & T, Google, Colgate, Budweiser, eBay, IBM, General Electric and McDonald's. According to experts, TNK created more than 10 million jobs from this rating, and their combined income is trillions of dollars.

Russia in the ranking of giants

In the rating of TNCs from Forbes, the Russian gas monopoly Gazprom won the 16th place, took the leading position among the companies belonging to the oil and gas sector. According to the American magazine, the profit of Gazprom is almost $ 25 billion, and its market value is $ 133.6 billion. Lukoil and Rosneft in the world rating received only 69th and 77th places among 115 companies from all over the world .

The international role of large corporations

Transnational corporations play a leading role in globalization in world-class R & D. The largest corporations account for more than 80% of registered patents and finances sent for scientific research. Today, more than 70 million people work at the enterprises of TNK, producing annually almost $ 1 trillion. In related industries, thanks to international companies, 150 million people are provided with jobs.

TNCs and governments

Today, TNCs in many countries of the world influence all spheres of public life without exception and have monopoly power. There are quite a few corporations that outperform the GDP of many countries in terms of turnover, the top managers of such companies usually conduct business directly with the governments of states. Mighty TNCs often shy away from any control, including at the political and economic levels. Experts and analysts have repeatedly voiced concerns about the possibility of negative pressure from TNCs on small countries. There are cases when the management of corporations sought support from the government, even if the actions of the companies had serious consequences for the people and the welfare of the country. For example, in 2003 Halliburton (USA) managed to conclude a contract for the restoration of infrastructure in Iraq for $ 680 million.

Russian TNCs

The emergence of large Russian corporations that occupy leading positions in the world market over the past 15 years has been the result of the development of the Russian economy.

In the early 2000s, favorable conditions for the emergence of several Russian companies on the global market were formed. TNK is a corporation whose parent company belongs to the capital of one country, owning foreign assets. TNK's criteria for the RF are the following: NLMK, RAO UES of Russia, MTS, Vimpelcom, TNK-BP, Alrosa. TNKs are Rosneft, Lukoil, Evrazholding, Gazprom, RusAl, Severstal, Sual, MMC Norilsk Nickel. All of the above companies have assets abroad, expand the world market.

It should be noted and respectable Russian banks that own foreign assets. These include Vneshtorgbank, Sberbank, Alfa Bank, MDM Bank. According to UNCTAD, transport companies, such as Novoship, Primorsk Shipping Company and Far Eastern Shipping Company, can be included in Russian TNCs.