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Файл:English of Global Economics. Учебное пособие
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But there might be another way to ensure good relations
with Ghana’s authorities. If Mr. Jonah finds the hurly burly of
Johannesburg trying, he could always return to the country where
he has long been tipped as a future president
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euphemistical [!jufi!mistikəl] более пристойный, приемлемый (о выраже
нии, слове); ounce унция (30 грамм); proven reserves разведанные запа
сы; charismatic [!k
up ремонтировать; ramshackle старый, разбитый; blunder грубая ошиб
ка; to denude оголять; swelter изнывать от жара, зноя; buoyant [!b
повышательный (о цене); to be in clover жить без забот, в роскоши;
to hedge хеджировать, страховать от потерь; coyly застенчиво, скром
но; volatile market неустойчивый рынок; strong rand сильный ранд (де
нежная единица Южной Африки); to placate умиротворять; hurly burly
смятение, переполох; to tip давать частную информацию (о возмож
ной победе на выборах).
riz!mtik] харизматический, обаятельный; to patch
ɔiənt]
Ex. 10. The text tells the story of the famous Japanese firm. Read it
and explain its gradual rise to the top and its global success.
The company “Brother” was incorporated in 1934, a year in
which the total of 60 sewing machines produced each month
was just slightly higher than the company’s number of workers.
Today, the company is a household name around the world,
producing millions of sewing machines, typewriters, word processors,
business machines, knitting machines, home electric appliances
and machine tools.
Despite the many advances in its size and technology, the
management style and principles that underlaid the Yasui brothers’
fledging venture remain the same today. One insight into this
approach is provided by the example of a Japanese feudal warlord
named Mohri Motonari. Wanting to impress the importance of
unity on his three sons, Motonari produced an arrow and broke
it in two. He then bunched three arrows and tried to break them,
but without success. His message was simple: “If you band together,
you cannot fail”.
With this lesson in mind, the eldest brother laid down the
foundations of the family business. The young Yasui team started
business by repairing chain-stitch sewing machines used for making
straw hats — essential accessories in Japan at that time. When they
gained enough experience and expertise to manufacture sewing
machines including a home-use sewing machines, they launched
the company which today is known as Brother Industries, Ltd.
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MULTINATIONAL CORPORATIONS
Without capital or backing from sympathetic bankers, the
brothers had no choice but to achieve technological and financial
self-sufficiency without borrowing money from banks. This
management principle is called “zero-debt management”. The
story of the company has been one of expanding from a solid
base and funding its own “organic” growth for nearly six decades.
After the Second World War, the company’s peacetime
rehabilitation came rapidly. Thousands of sewing machines were
destroyed and orders for their replacement swamped the company.
But the company met each order on time and was soon handling
an increasing inf lux of overseas commissions. In those heady
days, it could insist on a deposit’s being left with retailers to
ensure delivery of its popular machines.
Post war reconstruction in Japan was a significant turning
point for Brother. It was soon followed by another — one which
was to have huge importance for a fast-growing family business
working f lat-out to satisfy domestic demand for its products.
It was Mr. Yasui’s visit to the Singer factory in New Jersey. Having
spent 50 days in America, visiting one factory after another, he
felt, that the Singer operation was far too large. He knew he could
compete with the giant for the reason that they were smaller and
therefore much more flexible.
Mr. Yasui’s hunch proved well founded. And similar intuitions
over the half century since the foundation of the company have
made him a legendary figure not only in the company but all
over Japan. His philosophy and management principle was that
a man should focus energy on one line of business and have
concentrate on consolidating his initial technological base. Once
that base is good and solid, branches start to grow out of it
naturally. It is this vision and enterprise that account for the
tremendous variety and quality of Brother’s products.
There have been many important branches in the company’s
development. For example, its decision to manufacture typewriters
in 1961 led to their domination in the world typerwriter market.
The span of research and development from sewing machine
manufacturer to typewriter manufacturer was just three years. By
the late 1970s, electronics had begun to revolutionize all of its
technologies. In the 1980s, software development opened up
even broader horizons; the production of office equipment became
the company’s most important priority. In 1980, its production
aggregate in typewriters reached the 10 million mark. Nine months
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later, the company went ahead and began shipping its first
electronic typewriter.
Always striving for technological innovation, Brother in 1984
was the first company to refine the concept of combination
cooking, using microwave and standard convention technologies
simultaneously. Also in 1984, the company marketed its first
effective Japanese-language personal word processor, the Picoword.
This remarkable machine used a keyboard incorporating the 50-letter
Japanese syllabary; featuring a storehouse of 2,965 Chinese
characters, it functioned like a regular western-style typewriter.
In 1987, the company launched its first facsimile machine.
Brother launched manufacturing facilities in Taiwan in the
late 1970s, in the United Kingdom in 1984 and the United States
in 1987. In 1989, it set up parts manufacturing factories in Ireland
and Malaysia. That same year it marketed its first full-colour
copying machine developed in cooperation with the U.S. paper
company. The model’s compact size, rapid scan time and unique
use of a special coated paper continue to provide its competitive
edge.
Throughout the 1980s, its business machines surpassed sewing
machines in sales. The gap widens all the time. Yet, for the company
the sewing machine is still an important product. In developing
countries, sewing machines are notching up record sales and
worldwide turnover of industrial models is rising steadily. In the
late 1990s, the company is returning to its roots. Fashion has been
designated as one of its two chosen business fields. Its range of
sewing and knitting machines has been improved and expanded,
enabling users to create imaginative apparel for total fashion.
The aim of the company is to transform fashion fantasy into
fashion reality and, in so doing, to become an “Apparel System
Integrator”.
Its interest in fashion is not simply a fad for the 1990s. It
has always been closely tied to the fashion industry through its
manufacture of sewing and knitting machines. In fact, much
retail fashion has been produced on Brother sewing machines.
The company currently supplies the international textile industry
with 280 varieties of industrial sewing machines that can handle
over 4,000 applications.
“Image” is Brother’s other business field. The company currently
produces many types imaging equipment, including printers of all
sorts, typewriters, word processors and copiers: machines necessary
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MULTINATIONAL CORPORATIONS
for handling the variety of information in today’s business world.
The company is constantly investigating new technology fields,
creating cutting-edge products for the office. In both the Fashion
and Image fields, the company continues as a market leader by
supplying machines that meet the needs of professional users.
By 1992, the company hoped to generate half of its income
from the Japanese market and the remainder from overseas sources
through exports. The target for 1995 was $2.2 billion. Its expansion
plans are increasingly focused on Japan, Europe, America and
Asia. The company aims to expand its operations in each region
so that research and development, manufacturing facilities, sales,
service and finance support are locally based and independent
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of the head office
fledging venture зрелая, полностью развившаяся фирма; insight (into)
понимание; chain-stitch тамбурная строчка; expertise [!eksp
петентность; to swamp [sw
работать на пределе сил; hunch предчувствие, интуиция; syllabary
əbəri] слоговáя азбука; to notch up отмечать, набирать (очки); fad
[!sil
причуда, временное увлечение; imaging equipment оборудование, передающее изображение.
Ex. 11. Read the text and speak on the following: (a) American
multinationals; (b) non-American multinationals; (c) their impact
on the international economy; (d) protection of national sovereignty.
.
ə:!ti:z] êîì
ɔmp] засыпать (заказами); to work flat-out
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The problem of big business is one of old standing, dating
back to the period just after the Civil War. But recently that
problem has been given a new twist by the appearance of enormous
corporations whose business empires literally straddle the globe —
the multinational corporations. Take PepsiCo, for example. PepsiCo
does not ship its famous product around the world from bottling
plants in the United States. It produces Pepsi Cola in more than
five hundred plants in over one hundred countries. When you
buy a Pepsi in any other country, you are buying an American
product that was manufactured in that country.
PepsiCo is a far-flung, but not a particularly large, multinational.
In 1992 it was the 17th-largest U.S. company, ranked by sales.
Compare it with the Ford Motor Company, a multinational that
consists of a network of 60 subsidiary corporations, 40 of them
foreign-based. Of the corporation’s profits in recent years, one
third have come from abroad. And if we studied the corporate
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structures of GM or IBM or the great oil companies, we would
find that they too are multinational companies, with substantial
portions of their total wealth invested in productive facilities
outside the United States.
At least two thirds of the top one hundred American firms
have such far-flung production facilities. Moreover, the value of
output that is produced overseas by the largest corporations by far
exceeds the value of the goods they still export from the United
States. In 1985, for example, sales of the 150 largest multinationals
from their foreign branches amounted to over $415 billion. In that
same year, the total exports of merchandise from all U.S. firms
came to only 207 billion — half the value of the overseas
production of the 150 top U.S. multinationals.
The movement toward the internationalization of production
is not, however, a strictly American phenomenon. If the American
multinationals are today the most imposing (of the world’s biggest
five hundred corporations, over three hundred are American),
they are closely challenged by non-American multinationals. Philips
Lamp Works, for example, is a huge Dutch multinational company
with operations in sixty-eight countries. Of its 225,000 employees,
167,00 work in nations other than the Netherlands. Royal Dutch/Shell
is another vast multinational, whose home is somewhere between
the Netherlands and the United Kingdom (it is jointly owned by
nationals of both countries). Another is Nestlé Chocolate, a Swiss
firm, 97 percent of whose revenues originate outside Switzerland.
Thus, there is today an international economy that literally
envelops the economies of the 150-odd nations that constitute
the political world. It is doubtful that the international economy
would last a month, were the major nation-states to disappear
overnight; but it is an open question how long the present political
map will ref lect the realities of world power if the global economy
continues to grow in strength. It is increasingly difficult for the
Federal Reserve and any central bank to regulate the money supply
of its own nation because of the globalization of money itself:
$1 trillion worth of foreign exchange business is transacted daily
around the world. It remains to be seen how modern industrial
states will mesh their domestic economies into or insulate them
from the f lows of the international economy.
Two cautionary thoughts should be borne in mind as we take
stock of this very large and still very ill-understood problem.
The first is that the multinationals are not to be thought of only
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MULTINATIONAL CORPORATIONS
as foreign enterprises seeking to invade someone else’s market.
They also include enterprises that have located branches abroad
to invade their own markets. For example, much of the inf lux
of automotive and other manufactures from Mexico into the
United States arise from U.S. subsidiaries that have gone south
to take advantage of low wage costs there. Thus, the real challenge
of the MNCs is their ability to move technology around the
world. How does a country hold on to a technological edge if its
own companies are transferring that technology to their foreign
sites?
A second cautionary thought alerts us to the nature of the
multinational problem itself. It is not a question of a competitive
struggle among national economies, although interfirm rivalry is
certainly an important driving force behind the multinationals’
behaviour. But the underlying issue is different. It is a struggle
for a redefinition of national sovereignty itself. The real challenge
posed by the multinationals is that the world’s economic map
does not neatly coincide with its political map. This raises the
question of how national sovereignty will be protected as the
reach of international finance and production widens and deepens.
Here, the means by which sovereignty will be defended — tariffs,
quotas, regional trading blocs, new international organizations —
cannot be foreseen. But it is helpful to recognize that the issue is
not merely how the world’s markets will be divided up, but the
ways in which sovereignty itself will be expressed in the twenty-first
century
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to mesh (into) запутываться (в сетях); to insulate (from) изолировать
(от); to take stock (of) критически оценивать; automotive [
автомобильный.
Ex. 12. Read the following text and explain why there is a shift of
foreign investment away (a) from the underdeveloped areas of the
world toward the richer markets of the developed areas; (b) from
heavy technology to high-technology industries or from enterprises
in which capital was so important toward industries in which capital
is perhaps less important than research and development and
information technology.
ɔ:tə!moutiv]
!
Whether or not the multinational boom continues at its past
rate, the startling rise of multinationals has already changed the
face of international economic relationships. One major effect
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has been a dramatic shift in the geographic location and the
technological character of international economic activity.
The shift away from exports to international production has
introduced two changes into the international economic scene.
One change is a movement of foreign investment away from its
original concentration in the undeveloped areas of the world
toward the richer markets of the developed areas. A century ago,
most of the capital leaving one country for another f lowed from
rich to poor lands. Thus foreign investment in the late nineteenth
and early twentieth centuries was largely associated with the
creation of vast plantations, the building of railways through
jungles, and the development of mineral resources.
But the growth of the multinational enterprise has coincided
with a decisive shift away from investment in the underdeveloped
world to investment in the industrial world. In 1897, 59 percent
of American foreign direct investment was in agriculture, mining,
or railways, mainly in the underdeveloped world. By the end
of the 1970s American investment in agriculture, mining, and
railways, as a proportion of its total overseas assets, had fallen
to about 20 percent. More striking, almost three quarters of the
huge rise in direct investment was in the developed world; and
the vast bulk of it was in manufacturing (and oil) rather than
in plantations, railroads, or ores. Thus the multinational companies
have been investing in each others’ territories rather than invading
the territories of the underdeveloped world. In recent years there
has been a highly visible thrust of multinational investment in
manufacturing facilities in a few poorer nations — big factory
investments in Mexico, Hong Kong, Taiwan, Singapore, Korea,
most recently in China. Nonetheless, these investments are still
much smaller than the multinationals’ investments in the developed
countries.
The second economic change is really implicit in the first.
It is a shift away from heavy technology to high-technology
industries — away from enterprises in which vast sums of capital
were associated with large, unskilled labour forces as in the building
of railways or plantations — toward industries in which capital is
perhaps less strategic than research and development, skilled
technical manpower, and sophisticated management techniques
typical of the computer, petrochemical, and other new industries.
The dramatic shift away from Latin America into Europe and
away from transport, mining, and agriculture into manufacturing,
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MULTINATIONAL CORPORATIONS
a shift that would be even more accentuated if it were not
still dependent on oil as a major source of the world’s energy.
If solar energy or the fuel cell displaces oil within the next
decades, we can expect a still more rapid decline in investment
in the backward areas (especially in the Near East), and a
proportionately still-larger concentration of foreign direct investment
in manufacturing.
Multinationals have not only changed the face of international
economic activity, but also have added considerably to the problem
of controlling domestic economies. Assume that a country wants
to slow down its economy through monetary policies designed
to reduce plant and equipment spending. A restrictive monetary
policy at home may be vitiated by the ability of a multinational
to borrow abroad in order to finance investment at home.
More important, the jealous claims of nation-states that seek
to retain national control over productive activity within their
own borders and the powerful thrust of transnational corporations
for new markets in foreign territories introduce profound tensions
into the international world. On the one hand, the multinational
is in a position to win hard bargains from the host country into
which it seeks to enter because the corporation is the main bearer
of new technologies and management techniques that every nation
seeks. On the other hand, the power is by no means entirely
one-sided, for once a multinational has entered a foreign nation,
it becomes a hostage of the host country. It is now bound by the
laws of that country and may find itself forced to undertake
activities that are “foreign”. In Japan, for example, it is an
unwritten law that workers engaged by giant corporations are never
fired, but become permanent employees. Japan has been extremely
reluctant to allow foreign capital to establish manufacturing
operations on Japanese soil, to the great annoyance of foreign
companies. But if, as now seems likely, Japan is opened to American
and European capital, their corporations will be expected to behave
in the Japanese way with their employees. This will not be an
easy course to follow, since these corporations are not likely
to receive the special support that the Japanese government gives
to its own big firms.
Or take the problem of a multinational that is forced by a fall
in demand to cut back the volume of its output which would
lead it to close its least profitable plant. But this may bring very
serious economic repercussions in the particular nation in which
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that plant is located — so serious that the government will
threaten to take action if the plant is closed.
Perhaps little can be said other than that both nation-states
and huge corporations are necessary. They seem to be the only
ways in which the arduous and sustained labour of mankind can
be organized and well performed. Perhaps after the long age of
capital accumulation, it has become available to all peoples and
we may be able to think seriously about dismantling the giant
enterprise and the nation-state, both of which overpower the
individual with their massive organized strength. But in our time
the tension between them will be part of the evolutionary
development of the world
impli´cit подразумеваемый; to accentuate подч¸ркивать, выделять; fuel cell
топливный элемент; to vitiate искажать, деформировать; repercussions
последствия.
Ex. 13. Read the following text and discuss different ways that help
the firm to enter an array of industries and the importance of
leverage in its becoming truly global. Work in pairs.
In the early twentieth century when Ford was founded, the
company tried to control all inputs to the process. As a car
manufacturer used metals, you needed mines. The tires were made
of rubber, so you invested in a rubber plantation. Ford became a
conglomerate. It got obsessed with controlling all input materials
necessary to make the product, rather than thinking about how
its key capabilities could be leveraged into other areas.
The new logic means sticking to your competence, but utilizing
these skills in more than one industry. Today, we see at least
three different types of industrial leverage.
First, there is attitude-based leverage. Having understood the
needs of and targeted specific consumers, the organization may
then use the knowledge to supply them with more stuff.
Second, many firms engage in brand-based leverage. Marlboro
does it. Coca-Cola does it. Disney does it as a publishing, retailing,
and theme park operating company. Consider R. Branson’s Virgin,
which is involved in everything from airlines and railways to
clothing and cosmetics and from pensions to internet services.
The organization slavishly applies the core values of the brand
when deciding whether or not to enter a new industry. Virgin’s
management says that as many as 90 percent of the projects it
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MULTINATIONAL CORPORATIONS
studies are, at least potentially, extremely profitable, but if a fit
to these values cannot be found, they are rejected. Branson and
his colleagues understand that a brand is more than a name or
a logo — it is a promise and a contract with each and every
customer with whom you are dealing. And if people feel that
the offering does not live up to what they expect from the brand,
they may well decide to stop buying the other stuff as well.
Third, there are lots of cases of more purely competence-based
leverage. Honda focuses on engines, but utilizes its knowledge to
make cars, motorcycles, and so on. 3M is an expert on adhesives.
The Japanese company KAO is a major player in the branded
packaged goods industry — shampoos, lotions, etc. A couple of
years ago it was also one of the largest producers of f loppy disks.
Or look at AT&T, which considers itself an excellent processor
of transactions. It has a great brand and customer relationships
characterized by permanence and trust. Put all this together and
the company’s move into the credit card business can be
understood.
Leverage needs also to be international. A global corporation
does not necessarily mean big. Midget multinationals are already
around us. If you are one of 85 people at a company with
a 50 percent worldwide market share, you can really feel that
you work in an international organization. Do all 416,000 employees
at Siemens feel that way?
While globalization is here, it is often not really recognized in
the organization of firms. Although most companies access global
markets through exports, and many have their assets internationally
dispersed in the form of foreign subsidiaries, few have managed
to build global administrative structures and systems.
We also see clear differences across geography. To the typical
US multinational, foreign usually equals marginal. Well-known
international companies such as Microsoft and Intel still generate
more than 70 percent of their profits at home. At many US firms,
non-US business is still relegated to a box in the organizational
chart called ROW (Rest of the World). At the traditional Japanese
multinational, foreign equals different. Critical decisions are mostly
made in Japan, by Japanese.
But for many European multinationals, and particularly those
from small countries such as Sweden, Finland, Holland, and
Switzerland, foreign has always equaled “most of ”. Early on, these
companies had to come up with ways and solutions to tackle
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