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Part 2 Multinational Corporations

Words to remember

corporation (v) – a large company or group of companies acting together as a single organization

raw material (n) – a substance that is used to make a product

to involve (in) (v) – to cause (someone or oneself) to become connected or concerned with something; to include; to entail

emphasis (on, upon) (n) – special attention given to something to show that it is particular important

to expand (v) – to increase in size, degree, volume; to grow larger

dealing (n) – 1. the job or activity of buying or selling shares, stock, currency on a financial market

2. dealings – personal or business relations

base (n) – 1. a centre from which something is controlled and where plans are made

2.something that provides the conditions which are necessary for a particular activity or situation

to view (v) – to consider; to regard; to look at; to think about to focus (on) (v) – to direct one’s attention to something

to engage (in) (v) – to take part in

subsidiary (n) – a company that is at least half-owned by another company primarily (adv.) – mainly; chiefly

to operate (in) – to work; to function

operation (n) – a business activity or a company

environment (n) – physical and social conditions in which people live and work to vary (v) – to be different; to change, esp. continually

appreciation (n) – understanding of the good qualities or worth of something

Tasks to perform

1. Give English equivalents of the words and word partnerships used in the text.

Заниматься международной торговлей; обмениваться товарами или услугами; импортировать сырьё; экспортировать готовую продукцию;

иметь представление и правильное понимание внешней (зарубежной) бизнес среды.

2. Find the appropriate terms to the following definitions.

1)a company’s activities related to designing and selling a product or service by considering buyers’ needs or wants

2)to start a company’s or country’s official connections intended to exist for a long time

3)the job of buying and selling shares on a financial market

4)the main place from which a company controls its activities

5)a completely made product ready for sale

6)a company that is at least half-owned by another company

7)to grow larger in size and volume

8)understanding of the importance and worth of something

9)to change continually

3.Translate the following text into English.

Втечение всего периода развития корпорации, её организационная структура может меняться и проходить через ряд стадий. По мере того как корпорация растёт и развивается, она расширяет свою деятельность на международном рынке. Например, корпорация может начать заниматься созданием дочерних предприятий. И хотя она всё ещё отдаёт предпочтение внутреннему рынку, и её производственная база находится внутри страны, корпорация начинает смотреть на весь мир как на потенциальный рынок для своих торговых операций.

Создание дочерних предприятий позволяет корпорации вступить в новые деловые отношения с компаниями вне своей собственной страны. Развитие

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многонационального бизнеса означает рост производственных и маркетинговых возможностей корпорации.

В настоящее время крупные корпорации стали основным переносчиком иностранного капитала и технических знаний. Крупные компании, работающие на международном рынке, известны как многонациональные корпорации, транснациональные корпорации, международные корпорации, и глобальные корпорации. Не существует единого общепринятого термина. Многонациональная корпорация (MNC) или транснациональная корпорация может быть определена как компания, которой принадлежат производство, сбыт и приносящие доход активы (assets) в нескольких странах.

Продукты транснациональных компаний широко известны на мировом рынке. Транснациональная компания состоит из компании-учредителя и ряда филиалов. Транснациональная компания осуществляет прямые капиталовложения за рубежом в сырьевые отрасли, производственные предприятия и торговые филиалы, учитывая эффективность, прибыльность и доступ к ресурсам и рынкам сбыта. Размещая свои производственные мощности

(industrial facilities) в других странах,

компания использует и защищает своё конкурентное преимущество, например торговую марку. Прямые инвестиции позволяют компании снизить издержки обращения (distribution costs) – затраты на упаковку, перевозку и продажу товаров, и следить за действиями конкурентов, изменениями вкусов потребителей и т.д. Более того, фирма может избежать государственных ограничений, т.е. тарифов и квот. Корпорация может также использовать дешёвую рабочую силу и получить доступ к высоким научно-техническим достижениям.

These three texts are about globalization and how it affects businesses.

Read them and identify which one is:

a) in favour of globalization; b) neutral; c) against globalization.

1. Globalization of the economy has brought great benefits to advanced countries, such as the UK, and has encouraged growth and development in many Asian and Latin American countries, though Africa is not yet one of its beneficiaries. One of the benefits of globalization is the widespread connecting of people, sharing of

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information and ideas brought about in part by the Internet. 160 million people are now connected to email. 400 million people now travel each year to another continent, admittedly at great cost to the environment – one passenger journey produces as much pollution as a family car one year.

2.An entire global industry can be dominated by a small number of companies. For example, 85% of global tea trade is controlled by just a few companies. An entire country can depend on a single transnational company. Transnationals provide only 5% of employment while controlling 70% of world trade. 51% of the top economic units in the world are now companies not countries. It is argued that such companies are not interested in the countries in which they operate as employers and they have been accused of abusing their power. Often they adopt lower health and safety standards and employ workers in countries with the lowest wages and plough most of the profits and taxes back home.

3.As an indication of the size and importance, the turnover of four of the transnationals, General Motors, Ford, Exxon, Shell exceeds that of the whole of Africa. Microsoft has optimized its operations to the extent that it is now larger than many national economies (e.g. Switzerland). Twenty five years ago there were 7,000 transnationals; today there are 40,000. 90% are in the industrialized world. The top

500companies control 7% of world trade, 80% of foreign investment and 30% of GNP. The combined turnover of the ten largest transnationals exceeds the GNP of a large group of Third World countries.

beneficiary – a person or organization that gets an advantage or help from something admittedly – it must be admitted (that)

to abuse – to use badly

to adopt – (here) to accept; to approve formally

to plough back – to put earned money back into business

turnover – total amount of products and services sold by a company in a particular period

to exceed – to be greater than

to optimize – to make as perfect and effective as possible

GNP – gross national product – total value of goods and services produced by a country including income from abroad