Multinational companies are also called multinational companies, international enterprises, universal pictures or cosmic companies. These different names are designed to emphasize its "transnational nature", which is different from those "single-country companies" that only operate in one country. Due to different viewpoints and standards, there is no exact and unified definition of multinational companies at present. 1. Globalization of strategic objectives
(1) Consider not only current interests, but also future development; Instead of considering the local market where a company is located and the local gains and losses of a company in isolation, we consider the development of the whole company from the overall perspective, and some make a branch lose money in order to obtain the maximum profit of the whole.
(2) Differences with domestic enterprises:
Domestic enterprises: oriented by the domestic market, focusing on effectively organizing production and operation in China to maximize profits.
Multinational companies: take the world as the stage of activities, take the world market as the competition goal, and maximize the interests of the whole company and long-term interests.
2. Internal integration of the company
It is required to implement a high management system, take the parent company as the center, and unify the branches and subsidiaries all over the world into a whole. All branches and subsidiaries at home and abroad, under the unified command of the head office, follow a common strategy, make rational use of human and financial resources and realize global business activities.
3. Open operating system.
Operation stage: R&D-investment and factory building-manufacturing-sales of products.
Domestic enterprises: generally put in China, at most only put the final stage overseas, and the operating mechanism is closed inward.
Multinational companies: All stages are partly and wholly carried out overseas, and the operating mechanism is basically open to the outside world.
4. Transnational production and operation: production and operation are realized on an international scale.
5. Internalization of technology
Multinational companies allocate a lot of money from sales revenue to engage in research and development and arrange scientific research institutions around the world.
But the main research institutions are in the country where the parent company is located? First of all, cross-border mergers and acquisitions have become the main form of investment by multinational companies.
1. Two basic ways of transnational corporations' foreign direct investment.
(1) New investment?
(2) Transnational M&A: For a certain purpose, enterprises in one country purchase all the assets of enterprises in another country or share the control right of driving operation through certain channels and means of payment.
Before 1990s, transnational direct investment mainly formed production capacity through new projects in the host country and entered the target market. After the 1990s, especially since 1995, cross-border M&A has become the main way for multinational companies to expand abroad, with a sharp increase in transaction volume and a rapid increase in its proportion in the total outflow and inflow of global foreign direct investment (see table 7-149).
For example: Cross-border M&A in 2004
Second, equity and non-equity participation.
Equity participation
1. Share participation refers to the share of shares held by multinational companies in their subsidiaries.
There are four types of equity participation of transnational corporations in major capitalist countries:
(1) is fully owned, that is, the parent company owns 0/00% of the shares of its subsidiary/kloc-0.
(2) majority equity, that is, the parent company owns more than 50% of the shares of its subsidiaries.
(3) Fair possession, that is, the parent company owns 50% of the shares of its subsidiaries.
(4) minority equity, that is, the parent company owns less than 50% of the shares of its subsidiaries.
2. Influencing factors of equity participation
(1) Different countries to which the parent companies of multinational corporations belong.
(2) the national conditions of the country where the subsidiaries of multinational corporations are located
(2) Non-equity participation
1 has been widely used since 1970s, which mainly means that multinational companies do not participate in the shares of the host company, but provide various services to the host country through technology, management and sales channels that are not directly related to the shares. Non-equity arrangement is mainly a flexible measure adopted by multinational corporations in the face of the nationalization policy and the gradual withdrawal policy of foreign capital in developing countries, and it is also an important means for them to continue to maintain their position in developing countries.
2. There are many forms of non-equity arrangements, and the specific forms are constantly developing. The most common forms are licensing contract, management contract, turn-key contract, product sharing contract, technical cooperation contract and economic cooperation.
(1) License contract: A technology is transferred to a host country enterprise at a certain price, and the remuneration for the transfer of this technology is paid in the form of royalties, that is, the cost is increased according to the proportion stipulated in the agreement within a certain period of time.
(2) Management contract: also known as operation contract and management contract. This is also a kind of technology transfer.
It is divided into two categories: comprehensive management and technical management.
(3) turn-key contract: The multinational company is responsible for the whole project, including providing the technology and expertise needed for design, construction and installation, providing complete sets of equipment and facilities, building the factory, delivering all facilities and starting the factory.
(4) Product sharing contract: the host country and multinational companies share the products of the enterprise on the basis of the pre-agreed distribution plan, and all the equipment purchased by foreign companies will eventually be owned by the host country after a certain period of time.
(5) Technical cooperation contracts: important contracts. Multinational companies do not provide any capital, do not enjoy the ownership and purchase rights of products, and do not assume the responsibility of sales. They provide various technical services in all aspects of the project. The host country enjoys full autonomy, and the technical personnel provided by multinational companies work under the supervision of the host country in exchange for special expenses.
(6) Economic cooperation: also known as industrial cooperation, developed on the basis of the so-called East-West industrial cooperation between multinational corporations and the former Soviet Union and eastern European countries.
Industrial cooperation is a long-term contract, and there are various ways of cooperation. I. Organizational forms of transnational corporations
(a) The parent company of a transnational corporation
1. Concept: A parent company means that a company owns a certain number of shares in other companies, or can actually control the business decisions of other companies through agreements, so that other companies can become their own subsidiaries.
2, the control of other companies, generally take two forms:
(1) rights and interests
(2) Contract or dominant agreement
3, legal characteristics:
(1) actually controls the operation and management rights of subsidiaries.
(2) Holding subsidiaries by means of equity participation or non-equity participation.
(3) Limited liability of subsidiaries
(2) Branches of multinational corporations
1. Concept: It is an overseas branch established by the Head Office according to needs, and it does not have legal person status. It is an organization of the head office.
2. Legal characteristics:
(1) is not qualified as a legal person.
(2) The work is authorized by the head office.
(3) There is no independent property.
(4) Being the same legal entity as the head office, it is regarded as a "foreign company" in the host country and protected by the home country.
(3) subsidiaries of multinational corporations
1. Concept: refers to an economic entity with independent legal personality in law and economy, but its investment and production activities are controlled by the parent company.
2. Legal characteristics:
(1) Actual control or non-equity arrangement of the parent company over the subsidiary.
(2) Have its own company name and articles of association, and conduct independent accounting.
(3) Being regarded as a local company in the host country. Protected by the laws of the host country.
(4) Tax avoidance companies
1. tax haven: Also known as tax haven, it refers to countries and regions that have no tax or a very low tax rate, a loose interpretation of the corresponding taxable income, and have systems and operating facilities that are conducive to the financial affairs of multinational companies. For example, Bermuda, Bahamas, Panama, Swiss, China and Hongkong are all world famous.
2. Tax avoidance company: a multinational company that is formally registered in a tax haven and arranges its management headquarters, settlement headquarters and profit formation center there.
Second, the evolution of the organizational structure of multinational corporations
(1) Export Department
1, production: it is small in foreign countries, mainly exporting commodities.
2. The parent company has a loose relationship with its subsidiaries.
(2) International Business Department
1. Emergence: With the expansion of foreign business, the number of subsidiaries increases and the interests of internal units are exposed.
2. Responsibilities: Responsible for commodity export and foreign investment, and supervise the establishment and operation of foreign subsidiaries.
(C) the global organizational structure of multinational corporations
1, produced in the mid-1960s.
2. Role: Starting from the overall interests of the company, it overcame the shortcomings of the separation of domestic and foreign business of the international business department, greatly strengthened the centralized decision-making role of the headquarters, and adapted to the development needs of the integration strategy of multinational companies.
3. There are four different forms of internal structure.
(1) functional headquarters: narrowing the scope of responsibilities of the home country headquarters means that we can concentrate on coordinating all decentralized functions.
(2) Product line headquarters: unify foreign business activities, and at the same time make the growth of sales and profits closer to the synchronization with investment.
Insufficient: lack of contact between product line headquarters.
(3) regional headquarters: set up headquarters by region, responsible for coordinating and supporting all activities of all branches in a region.
(4) Matrix structure
On the one hand, one department is responsible for the special responsibility system, which cannot solve and coordinate all functions. Interconnection between regions and products, especially single channel information transmission, is not conducive to competition. Many multinational companies combine functions, products and regions.
(d) The latest progress in organizational change of transnational corporations.
With the development and application of information technology, its development trend is as follows:
1, change from "flat" to "thin"
(1) change to "flat": the vertical structure is being demolished, and the middle management level is rapidly decreasing.
(2) Become "thin": horizontally compress, take out the service department in the original enterprise unit and set up a service company separately, so that the enterprise can be freed from the later services such as legal affairs and paperwork.
2. Global network organization
The biggest feature of (1) is that the process is short and the process does not overlap, which makes the information sufficient and the distortion small.
(2) It consists of two parts: a core; Stereo network