Transnational Corps

Readings:

• Dicken: Transnational Corporation

• Dicken: Conflict and Collaboration

• Locke: The Case of Nike

As stated in one of the readings, a transnational corporation (TNC) is a firm which has the power to co-ordinate and control operations in more than one country, even if it does not own them. The most interesting of these three readings, The Case of Nike, exemplifies that statement very factually and in good detail. As Locke presents, before Nike even became Nike, the two founders took advantage of a globalized shift in the economy, seeing how domestic companies manufacturing appliances are being outsold by international companies, they applied the same logic to sportswear and ventured into Asia, one step at a time.

Nike being a transnational corporation, has clearly adhered to the three basic characteristics of a TNC, that being in short co-ordination of production chains between different countries, the ability to take advantage of factors of production, more specifically in Nike’s case, labor and the ability to switch locations when one location becomes too expensive oftentimes as a direct result of the country’s progress on an industrial level. Nike executed these three values very well and as a result has seen extreme profits over the years.

One argument made with “logic” reasoning, was that a corporation will eventually have to internationalize for one of two reasons. As competition becomes more global, firms no longer compete on a domestic level but are forced to compete with international companies entering your home market. Also the simple calculation yet extremely complicated application of Profit = Revenue - Costs comes into play. I agree with these reasons to a point, even though it states directly that these rules or guidelines will not apply to all corporations/firms. It still suggests a rather bleak future for companies that venture otherwise, who will eventually be outsold, outperformed and overshadowed by the larger, more powerful conglomerates.

Focusing back on Nike, the perils of globalization that Nike was battered with in the 1990’s through accusations