In Russia the tnc is defined as a national monopoly with foreign assets. In the us the tnc is

defined as a joint stock company (incorporated enterprise). On the whole, TNCs make a large

single international manufacturing and marketing complex where the right of property belongs only

to the representatives of the country-founder.

Affiliated branches and subsidiaries can be mixed enterprises primarily with national participation.

TNCs have comparatively independent subdivisions of manufacture, cooperation, and sale

of finished products, as well as research and development, engineering and consumer services. As

a result of merging several companies of different countries on the basis of production and scientific

and technological unification multinational corporations (MNCs) have sprung up.

The Swiss-Swedish corporation ABB (Asea, Brow, Bovery) specializing in the mechanical engineering

and electronics provides an example of a MNC in Europe. The capital of such corporations

Is usually divided in the ratio of 60 to 40, as e.G. Between England and Holland in the case of

Royal Dutch Shell.

Global corporations (GCs) stand among international companies that present all power of

modern financial capital, and they should be referred to TNCs and MNCs. They could be engaged

In chemical, electronic, oil and automobile production, information technology, banking and some

other activities.

What are the reasons for TNCs coming into being?

Most common reason for their formation is the striving for superprofit through internationalization

of production and capital on the basis of the cross-border development of productive forces. Out

of the 500 most powerful TNCs, 85 control 70 per cent of all investments (capital outlay), sell 80 per

cent of all output of electronics and chemicals, 95 per cent of pharmaceutics, about 76 per cent of

mechanical engineering products. As a whole, they manage 75 per cent of gross world product.

Each TNC in the US has enterprises on the average in eleven different production branches, while

the most powerful — in 30-50 branches. Among 100 leading industrial companies in Great Britain

there are 96 diversified enterprises, in Germany — 78, in Italy — 90. At present, e.g., the Swedish

autogiant Volvo manufactures not only the world-famous automobiles and aircraft engines, but other

articles as well. This TNC has 30 diverse subsidiary companies in Sweden and abroad. They are engaged

In mining, the production of timber, food stuff, tools, and even the beer Prips.

In their expansion, tnCs make use of various means of developing the world market:

• licensing

• franchising (franchise)

• managerial contracts

• rendering marketing and research and development services

• commissioning enterprises lock, stock and barrel

• joint ventures, etc.

Dynamic policy of capital investments and research and development ensures the leading position

of the TNC in labour productivity, quality and competitiveness of the output. The corporation

Electrolux, set up in 1912 as a result of merging two small companies in Sweden, entered the

market of Australia and New Zealand as far back as the end of the 1920s. Over the last ten years the

TNC Electrolux has absorbed the company White Consolidated, ranking third in the USA as a

manufacturer of everyday electrical appliances under the well-known brands Westinghaus, Gibson,

and Zanussi — the largest manufacturer of electrical engineering goods in Italy and countries

of South-Eastern Europe. Besides, Electrolux took over AEG, the main manufacturer of electrical

engineering goods in Germany. At present more than 110,000 workers are employed in Electrolux

enterprises. With the annual turnover of about $20 billion, Electrolux is the world leader in manufacturing

and marketing electrical appliances, selling them in 75 countries.