1. The cross-border networking of companies — международная сеть компаний (предприятий)

2. The расе of globalization... Facilitated by improvements in transport and communications —

ускорению темпов глобализации... способствовали усовершенствования в системах

транспорта и коммуникаций

3. To allay concerns — уменьшить обеспокоенность

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22.7.1.2. Read the text “Multinational Corporation, Multinational Enterprise.” Give a brief account

of it in Russian.

Multinational Corporation, Multinational Enterprise

A multinational corporation, or multinational enterprise (MNC, MNE) is a company, or more

correctly an enterprise, operating in a number of countries and having production or service facilities

outside the country of its origin. A commonly accepted definition of an MNE is an enterprise

producing at least 25 per cent of its world output outside its country of origin. There are, according

to United Nations estimates, 35,000 corporations with direct investments outside their headquarters

country, with over 170,000 affiliates over which they have effective control. The 100 largest

MNEs account for about 40 per cent of cross-border assets.

The multinational corporation takes its principal decisions in a global context and thus often

outside the countries in which it has particular operations. The rapid growth of these corporations

since the Second World War and the possibility that conflicts might arise between their interests and

those of the individual countries in which they operate has provoked much discussion among economists.

MNEs possibly account for over one-quarter of world trade, but earlier fears that they would

come to dominate the world economy now seem misplaced. Bartlett* and Ghoshal** make distinctions

between three types of international company which are widely accepted as useful. They argue

that neither the decentralized types of business with strong local presence (multinational), nor the

more centralized types of business which build cost advantages through centralized production (global)

or exploit the parent company’s research and development and systems capability (international)

are now sufficient to maximize competitiveness. These authors claim that the transnational company

which somehow blends these approaches by differentiating contributions by national units to a

none the less highly integrated world-wide operation has the most successful approach.

Commentary and Notes to Text 22.7.1.2

1. A commonly accepted definition — общепринятое определение

2. Bartlett and Ghoshal — известные американские экономисты

3. strong local presence... — сильное местное присутствие...

4. centralized production — централизованное производство

5. the parent company — родительская, материнская компания

6. none the less — тем не менее

7. highly integrated... operation — в высшей степени комплексная деятельность

Nothing could be more American than Burger King, Brooks Brothers, A&P supermarkets, Smith

& Wesson guns, and the Pillsbury doughboy, right? Not quite, for those companies are now owned,

respectively, by the British, the Taiwanese, the Japanese, the Canadians, and the unified Germans.

The Japanese own over half the office space in downtown Los Angeles. Chicken of the Sea tuna is

owned by an Indonesian firm. The venerable Algonquin Hotel in New York is owned by a group from

the Far East. The Carnation Company is now owned by Nestle, S.A., from Switzerland. Firestone

Tire and Rubber is now owned by the Japanese company Bridgestone. In late 1989 Mitsubishi, a

Japanese company, purchased a 51 percent stake in Rockefeller Center in the middle of Manhattan.

Direct foreign investment in the United States has increased to the point where some Americans

are starting to want to restrict it. Direct foreign investment is the quintessential evidence of

the global integration of the American economy. The estimate for foreign purchase of US real

estate, buildings, and businesses for 1991 is as high as $100 billion. This buying binge by foreigners

started in the late 1970s and has continued unabated. Much of it has been due to political instability

and worries about loss of capital in many parts of the world. Latin Americans fearing continued

revolution and political unrest have invested heavily in the United States, particularly in Florida.

* Bartlett Donald L is an American economist .

** Ghoshal Sumantra is an American economist (an Indian School of Business).