American Companies & Globalization - Essay Example

The economy of the country has experienced slow growth in the recent past in spite of being the largest single market of the world. The success of the operating organizations depends on the situation that is prevailing within the country and abroad. The multinationals are much more interested in drawing their strategies keeping into account the global perspective. The activity of foreign affiliations is indeed a complement for the key parent activities in the country in terms of employment, compensations towards workers and capital investment.

In order to operate globally it is required or the organizations to expand as well as integrate the foreign activities as such activities cannot be substituted. The expansion by the U.S. parents along with the affiliates contributes to increase the productivity and also contributes to improve the standard of living of all Americans. The rising concerns for the U.S. multinationals are mainly focused on the competitiveness. The success of the multinationals is very important as these companies have been productive for a long time and form the pillars of economic strength.

The companies are engaged in serving the fast growing markets abroad. The following figure reports the share of the private sector economic activities of U.S. that is accounted for by U.S. parents. It can be depicted from the figure above that parent companies of United States perform large shares of the productivity of America which tends to enhance the activities paving the path for high average compensation for the workers of the country. Accessing the foreign consumers is one of the drivers for the global engagements of the U.S. multinationals.

The new customers can contribute in strengthening the revenues of the companies as well as the profitability of the company will witness the upward rising curve. The Statistics show a variation in the rate of GDP over the periods. One can held the evolving size of the national markets and the perspective of the consumers as the reason. When a U.S. multinational operates globally, the company can take hold of foreign currencies which they can divert into the economy of the residing country. Therefore, the economy boosts up with foreign inflow and thereby the company contributes in improving the economic structure of the country as a whole.

The multinationals involved in producing goods and services are also engaged in exploration of resources and extraction. Following the policy of diversifying the products and global engagements, the U.S. multinationals are reducing the risk of crisis since a slowdown in one of the countries can be nullified by prosperity in the other. Therefore, indirectly, the economy of the country is as well enjoying a shield against the turbulences. The multinationals also contribute in increasing the exports of the country.

The Balance of Payments of the country improves being the resultant. The integrated operations that the multinationals follow across borders stimulate the exports potential of the country. Let us take the example of IBM. Even today when U.S. remains as the largest single market the company earns more than two-thirds of the total profits from abroad. A great deal of sales accrues from the exports of U.S. or the products which are produced or designed in the country. The company annually brings the economy billions of dollars from its global operations.

In the last two years, the company repatriated more than 20 billion dollars