Multinational Enterprises and the Global Economy - Assignment Example

?"How far, if at all does the proposition that the global economy is run in the interests of a small group of wealthy executives, business professionals, sympathetic politicians and media organizations help in understanding the behaviour of transnational corporations?" In an attempt to understand the concept of transnational companies, it is of great importance that views by various researchers and analysts are critically reviewed to understand this concept. With the concept of the transnational companies creating diverse views in the business world, according to Eckes (2011, pp.44), this theme is indeed one that needs to be discussed in broad detail. This essay will focus on transnational corporations and how they are operated for the benefits of a few individuals who enjoy great monopoly. The essay will then portray the fact that, the transnational corporations have a lot of to do with benefiting a small group of people who operate these businesses. Additionally, this current class of people will be scrutinized and the methodologies they have applied so as to have power over the economic aspect of the market-that of making sure that they do not center on one state, but many nations. The fact that a great percentage of persons find themselves making purchases of goods produced by the transnational companies will be analyzed as well as the reasons behind transnational corporations claim a great percentage in the global economy. Finally, the ‘transactional class’- that controls the trade in the economy in the view of Teivainen & Patomaki (2004, pp.34) - will be scrutinized to assess if it really controls the major sources of production, to their benefit. Letto-Gillies (2012, pp.261) attests to the proposition that transnational corporations are operated for the benefits of a few individuals who enjoy great monopoly. These corporations operate in more than one country, and have claimed a lot of backing both in the economic and political arenas in the globe today. Landau (2001, pp.144) continues to argue that transnational companies are very powerful institutions, whose power surpasses the interests of the borders within which they are located or in which they operate. From this perspective, it is arguably correct to note that the multinational corporations are monitored and controlled by a specific group of persons who are powerful and want to manipulate all the exiting opportunities to benefit themselves from the huge amounts of profits existent in the these business transactions (Synott, 2004, pp.108). On another point of view, Sklair (2011, pp.25) also indicates that the transnational corporations have a lot of to do with benefiting a small group of people who operate these businesses. Their major aim is to get the best the out of the entire business dealings. The power of the transnational systems, however, is way being overshadowed a definite class of persons whose major aim is to influence the entire situation. A group of independent capitalist systems are the sole owners of the capital system. Many changes have taken place in the international economy, in such a way that the traditionalist point of view that a particular state controls the corporations. Sklair (2011, pp.27) argues that the current class of people can arguably be referred to as the major beneficiaries of the transnational corporations. Major reasons behind the existence of this class of people are to amass as much profit as possible from the entire business. These groups of people endeavor to ensure that the new class of people are always at par with the new developments in the global society and devise new measures of controlling the new developments in the country. In the recent years, these groups of individuals have been managed to control trade in the global arena (Dicken, 2003, pp.76). This class of persons has managed to control trade through regulating the forces of the market, the processes that allow thriving of the trade as well as the practices. In essence, this is to say that the regulation of the markets revolves not only the nation state and its governments, but on a specific class of people. On a critical aspect, transnational companies have managed to have power over the economic aspect of the market by making sure that they do not center on one state, but many nations. These corporations, therefore, deal with specific people from diverse countries. This can be justified to mean that it is only a small group of persons- that can be described as powerful individuals- that control the inputs and what goes out of their markets. Sklair (2011, pp.22) indicates that the transnational class of individuals has managed to come up with specific interests which they work towards attaining at all costs. As a result, these factions of persons have gotten hold of huge amounts of turnover, an aspect that has kept them in the business for a long time. It is apparent from this argument that the transnational companies are not for the benefit for the specific states, but for a specific group of persons who have the means to control others for their own benefit. On a cultural point of view, a great percentage of persons find themselves making purchases of goods produced by the transnational companies. Such goods are usually branded in such a way that they attract a huge percentage of consumers to the purchasing the goods. In reality these goods are only produced by a small group of persons that are concerned with the views of a specific country but the ‘transactional class’. This is yet another validation of the fact that the global economy operates for the benefit of only a small group of individuals. ‘Transactional class’- that controls the trade in the economy- has been indicated to control the major sources of production, to their benefit. This is according to Fuller (2011, pp.12 )who indicates that in an attempt to uplift their populace from the high poverty levels in their countries, the concerned governments have found themselves in situations whereby they cannot fix the problems in their countries, as the few individuals have resulted to taking advantage of their vulnerabilities. In return the ‘transactional class’ has managed to come up with means of enriching themselves by taking charge of their entire production resources in these countries. It is unfortunate that these countries believe that the ‘transactional class’ is out to promote the best in the countries, but in real sense, no wages, profits or job opportunities are being created. In the real sense, a great percentage of these countries are going through a difficult time trying to adjust to the complicated situation they find themselves going through, especially in terms of increasing the amount of funds that is dedicated to spending in these businesses (Lundan &Dunning, 2008, pp.765). In light to this argument it is justified to argue, that the proposition that the global economy is run in the interests of a small group of affluent people in understanding the behavior of transnational companies indeed has a lot of evidence. Though the operations of the transnational corporations have for a long time been fashioned in such a manner that it may sound appealing to the eyes of many people, this can be referred to as a mere perception by a small group of people. Wai-Chung (1998,pp.1) indicates that the ‘transactional class’ has managed to maximize all the opportunities they have had in terms of acquisition of resources, and controlling all the production measures in an attempt to control their businesses. It is even evident how well this class has managed to manipulate governments of various countries to suit their needs. The economic formation of the global economy has a lot to do with the decisions made by the ‘transactional class’. This involves all the decisions made by this class, in relation to controlling the trade and regulating the expenditures and income generating activities of the economy (Duiker & Spielvogel, 2008, pp.938). However, it is advisable to scrutinize the operations of these corporations in order to have a clear understanding of the processes that take place within their structures. Transnational corporations claim a great percentage in the global economy (Eriksen, 2007, pp.75). These corporations take almost 15% of the global overseas assets and 22% of all the total sales of the TNC’s (Pacione, 2008, pp.283).These percentages belong to a specific group of people and not the nation states. The rising number of these corporations is very alarming, to an extent that the analysts of the free markets argue that these corporations have a great likelihood of causing a lot of adverse effects in the economy (Pacione, 2008, pp.283). Since a majority of them are too strong to be swept away by the competition and market forces in the economy, they enjoy monopoly in the markets. It is these reasons that these corporations are likely cost the ordinary consumers more money for their products. Most of the times, the transnational products are branded, differentiating them from the normal products in the market. This differentiation leads to the consumers paying more if they have to consume the products of high quality. In this case, they not only acquire a lot of profit from the trade, but also claim a great percentage of the economy (Sauvant, 2008, pp.56). They also bar other producers from performing to their level, ultimately minimal competition on their part. Conclusively, it is justified to argue that transnational companies claim a great percentage of the global economy. Form the discussion above, it is evident that these companies are not for the benefit of the owners of the means of production, but to a small group of people who have enough resources to manipulate the ‘weak’ states to their own advantage. Just as analysts of the business economics indicate, if the situation of the transnational corporations is not assessed, it might get out of hand, with the profits from the business landing on the wrong people. In relation to the topic, there is enough evidence to validate that the transnational companies are indeed, assets of a group of people, ‘the transnational class’, who are constantly on the move to minimize any form of competition that may jeopardize their business. References Dicken, P. (2003) Global shift: reshaping the global economic map in the 21st century. London: Sage Publishers. Duiker, W. & Spielvogel, J. (2008) World History, Volume2. London: Cengage Learning. Eckes, A. (2011) The Contemporary Global Economy: A History Since 1980. New York: John Wiley & Sons. Eriksen, T. (2007) Globalization: the key concepts. London: Berg. Fuller, C. (2011) Governing global business. London: University of East London. Landau, A. (2001) Redrawing the global economy: elements of integration and fragmentation. New York: Palgrave Macmillan. Letto-Gillies, G. (2012) Transnational Corporations and International Production: Concepts, Theories and Effects. New York: Edward Elgar Publishing. Lundan, S. &Dunning, J. (2008) Multinational enterprises and the global economy. New York: Edward Elgar Publishing. Pacione, M. (2008) Urban geography: a global perspective. London: Routledge. Sauvant, K. (2008) The Rise of Transnational Corporations from Emerging Markets: Threat Or Opportunity? New York: Edward Elgar Publishing. Sklair, L. (2001) The Transnational Capitalist Class. London: Blackwell. Synott, J. (2004) Global and international studies: transdisciplinary perspectives. Australia: Cengage Learning Australia. Teivainen, T. & Patomaki, H. (2004) A possible world: democratic transformation of global institutions. New York: Zed Books. Wai-Chung, H. (1998) Transnational corporations and business networks: Hong Kong firms in the ASEAN Region. London: Routledge. Read More