History of multinational corporation

Answer 1

The view that global firms were becoming divorced from the nation state began to be

widely expressed as the pace of globalization accelerated from the 1980s. The

consequences of the growi ng global integration of international production, the

international dispersion of key functions such as tech nological innovation within

multinational systems, the fact that some multinationals employ far greater numbers

of people and sell far more products a nd services outside their home economy than

within all have all encouraged the hypothesis of a "borderless world," is the now

classic words of Ken' ichi Ohmae, in 1990.

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The limitations of the "borderless world" hypothesis have been much

discussed in recent years. It is evident that the importance of geography has not

disappeared, and that trade and investment flows some strong locational patterns

which indicate that the world is more regi onalized than globalized. Alan Rugman has

described the "regionalization" of production, and Pankaj Ghemawat has talked of

"semi-globalization."

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However the awesome size a nd international scope of a

handful of global corporations has encouraged many writers to reflect how they have

outgrown and dwarf national states. Alfred Chandler and Bruce Mazlish have

described them as the new Leviathans which "increasingly challenges the power of

the nation-states and of regional entities."

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A forceful exponent of th is view was the American political scientist Robert

Reich. In The Work of Nations he put the case for "the coming irrelevance of

corporate nationality." Reich noted that many of the best known names in US

corporate history - CBS Records, Columbia Pictures, American Can, Pillsbury - were

now foreign-owned, and went on to suggest that those who expressed fears of this

foreign take-over were guilty of "outmoded thinking." Th e reason was that while in

the past there were recognizable US corpor ations whose interests could be identified

with those of the United States, contemporary multinationals bore only a superficial

resemblance to their mid-twentieth century counterparts