In the past five years the globe has experienced a recession and this has had an impact on MNC’s. Many MNC’s stopped or reduced their OFDI but China took this opportunity to build their profile. Chinese product seems to be the dominated name in many products and textiles. Globalisation has been made feasible due to the betterment on technology and transport links. This report looks at the positive and negative impacts of globalisation on MNC’s. The paper will show the drivers as well as the advantages and disadvantages for globalisation with the support of different academics. Introduction
Globalisation can be defined as the process of social, political, economic, cultural and technological integration among countries around the world.’ Luthans,F (2009). Globalisation creates opportunities for businesses providing multinational corporations with scarce commodities and comparative advantage. Giddens (1999) argues that globalisation that “globalisation is a complex set of processes and not one single entity” Globalisation has had both a positive and negative impact on MNC’s over that past 5 years. MNC’s role within globalisation is to provide employment, improve a countries infrastructure and the economy.
Impacts of globalisation
Dunning’s theory (1998) suggests reasons for companies making the shift to become a MNC. Although his theory was correct it did not factor in the process of globalisation which can be seen to be a driving force behind the MNCs of today. Over the last five years the global MNC has suffered greatly due to the current recession brought on by the collapsing of global financial markets. It can be seen that since the financial crisis MNC are restructuring and changing their strategies to match the new economic climate. The impact this has had on MNCs across the globe has been both positive and negative. It can be argued that the impact felt by MNCs is a result of them being exposed to the effects of globalisation