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Explore the role and impact of multinational corporations in the global economy, including their structure, strategies, and contributions to international trade and transportation.
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Topic 2 – The Global Economy A – Genesis of the Global Economy B – Multinational Corporations C – International Trade and Transportation
B – Multinational Corporations Corporations in the Global Economy The Structure of Multinationals Impacts of Multinationals Large Multinational Corporations
Corporations in the Global Economy • Context • The global economy is organized by trade and infrastructures supporting these exchanges. • Corporations: • Separate legal entity, usually used to conduct business. • Main agents generating trade and using the international transport system. • Some are generators of movements (producers). • Some are attractors of movements (retailers). • Some are involved in transportation and distribution. • Some provide services (law, accounting). • The great majority combine elements of the above. • About one third of global trade consists of intra-firm transactions.
The Structure of Multinationals • Multinational corporation (MNC) • Provides goods and/or services. • A corporation that takes a global approach for: • Its inputs (raw materials, parts). • Its outputs (customers). • Different parts of the industrial system are located in places where they are the most productive. MNC Inputs Outputs
Types of Multinational Corporations by Strategy What are the main types of multinational corporations?
Global Sourcing: The Boeing 787 Dreamliner Forward fuselage: Kawasaki Heavy Industries (Japan) Spirit Aerosystems (USA) Wing box: Mitsubishi Heavy Industries (Japan) Wing ice protection: GKN Aerospace (UK) Centre fuselage: Alenia Aeronautica (Italy) Escape slides: Air Cruisers (USA) Rear fuselage: Boeing South Carolina (USA) Vertical Stabiliser: Boeing Commercial Airplanes (USA) Doors & windows: Zodiac Aerospace (USA) PPG Aerospace (USA) Lavatories: Jamco (Japan) Flight deck seats: Ipeco (UK) Raked wing tips: Korean Airlines Aerospace division (Korea) Flight deck controls: Esterline (USA), Moog (USA) Horizontal Stabiliser: Alenia Aeronautica (Italy) Engines: GE Engines (USA), Rolls Royce (UK) Centre wing box: Fuji Heavy Industries (Japan) Aux. power unit: Hamilton Sundstrand (USA) Engine nacelles: Goodrich (USA) Tools/Software: Dassault Systemes (France) Navigation: Honeywell (USA) Pilot control system: Rockwell Colins (USA) Wiring: Safran (France) Passenger doors: Latécoère Aéroservices (France) Landing gear: Messier-Dowti (France) Electric brakes: Messier-Bugatti (France) Tires: Bridgestone Tires (Japan) Cargo doors: Saab (Sweden) Final assembly: Boeing Commercial Airplanes (USA) Prepreg composites: Toray (Japan) Source: www.newairplane.com
The World’s 20 Largest Corporations by Revenue, 2017 ($US millions) Read this content Explain what are multinational corporations, their role and function.
Short Assignment: The Impacts of Multinationals "(A corporation has) neither body to jail nor soul to damn." - Lord Edward Thurlow (1731-1806) Discuss the positive and negative impacts multinational corporations can have.
C – International Trade and Transportation Trade and the Global Economy Global Trade Patterns International Transportation
Economic Rationale of Trade Explain the economic rationale of trade Country 1 Country 2 Country 1 Country 2 Country 3 Country 3 Country 4 Country 4 Without Trade With Trade Small national markets.Limited economies of scale.High prices and near monopoly.Limited product diversity.Different standards. Increased competition.Economies of scale.Specialization.Lower prices.Interdependencies. Read this content
Share of Product Groups in World Merchandise Trade, 1900-2015 Read this content
Modal Shares of World Trade by Volume and Value, 2008 Read this content
World’s 20 Largest Exporters and Importers, 2015 Read this content
American Foreign Trade by Maritime Containers, 2010 (in TEUs) Read this content
Cumulative Waves of Transport Development Read this content 17-18th Century 19th Century 20th Century 21st Century Air Airports Global mobility systems Inland and national accessibility Punctual inland access Land Canals Railways Highways National mobility systems Maritime Sailships Steamships Containerships International trade and mobility Global distribution systems Empires and global trade networks Explain the main transport developments since the 17th century
Maritime Shipping Routes and Strategic Locations Read this content
World’s Major Container Ports, 2012 Read this content
Passenger Traffic at the World’s Largest Airports, 2010 Read this content
Freight Traffic at the World’s Largest Airports, 2010 Read this content
Global Transport Using the maps on the previous slides, provide an overview of the global transport system such as its main hubs and flows.