Multinationaltransnational Corporations - Essay Example

Globalization leads to a situation in which national borders are becoming increasingly irrelevant for a number of reasons. For example, the outsourcing of many different manufacturing and service industries to Asia has led to the growth of a middle class in some regions of the world that had not previously seen them. Just as archaic globalization started with ease of transport provided by domesticated animals, so ease of communication through computer networks has enabled the remarkable system in which an American calling a service line in America may well be linked to a service center in India for a computer problem.

Indeed, if silk was the original driving force of the original, archaic globalization, it is computerization that is the fuel and engine for current globalization. The labor and economic laws of one country may be essentially bypassed by the multinational company that locates different sectors of its activities within different countries. The "Asian Tigers" such as Taiwan, Thailand and Singapore, have used this flow of money and services into their country to develop their own indigenous industries.

Car manufacturers in Japan have used their superior design and production techniques to come to a point where they may soon occupy the dominant position within the American automobile market, a fact that would have been virtually unthinkable forty years ago. Again, it is automation and computerization of design and manufacture that has enabled companies such as Toyota and Honda to expand almost exponentially. The process of globalization have enabled these companies, founded and based within the Asian country of Japan, to prove their undoubted superiority over products manufactured in the West.

The same can be argued for a whole host of products from cameras to computer games. This computerization is not only an engine through the outsourcing of various business functions to countries with much lower labor costs by advanced countries, but has also enabled more sophisticated supply chains that can react of market changes with much greater sensitivity. The development of massive multinational corporations for whom national borders are less important than their business models have led to a "shrinking" of the world.

Wal-Mart, the largest and most successful retailer in the world, imports much of its merchandise from Asia, and is also seeking to open new stores within that region. Wal-Mart, an ostensibly "American" company, is in many ways actually an Asian (specifically Chinese) company is the source of labor and production is regarded as the defining factor. Another manner in which multinational companies are threatening national sovereignty is through the development of large, international or even regional trade areas that are specifically designed to ignore national borders.

For example, the North American Free Trade Agreement (NAFTA) makes a huge region, ranging from Canada to Mexico and into Central America that multinational cor