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2. History of TNCs The Organizational Structure The rises of TNCs in the 21 st century Example

3. A transnational corporation (TNC) is a huge company that does business in several countries.

4. Examples: Nestlé Unilever Cadbury-Schweppes BP-Amoco

5. From the Origins to the Second World War

6. The search for resources including minerals, petroleum, and foodstuffs. For example: The US agribusiness giant United Fruit Company: controlled 90 per cent of US banana imports by 1899. Royal Dutch/Shell accounted for 20 per cent of Russia's total oil production. In Japan: Mitsui and Mitsubishi – “financial clique”

7. 1950s: Banks ->Industrial stocks Shipping, transport (especially by air), computerization, and communications In 1971 there were 333 such corporations, one-third of which had assets of US$1 billion or more. In 1906 there were two or three leading firms with assets of US$500 million New advertising capabilities helped TNCs expand market shares. TNCs had come to control 70-80 per cent of world trade outside the centrally planned economies

8. 1970 7,000 parent TNCs Today Jumped to 38,000. 90% of them are based in the industrialized world----control over 207,000 foreign subsidiaries.

9. Top 100 firms which in 1992 had US$3.4 trillion in global assets. The top 100 TNCs also account for about one-third of the combined outward foreign direct investment (FDI) of their countries of origin. Between 1988 and 1993, worldwide FDI stocks: grew from US$1.1 to US$2.1 trillion

10. TNCs: the embodiment of modernity and the prospect of wealth: full of technology, rich in capital, replete with skilled jobs. Less-industrialized world: burdened by debt, low commodity prices, structural adjustment, and unemployment.

11. 1992 Over US$50 billion 1993 Jumped to US$71 billion 1994 US$80 billion

12. This is most important tasks for top managers of any company. “If everyone in a company is «in place» and knows his duties, if there are rules of interaction between departments, company's activities will remind a tuned mechanism which works with maximum results and minimal costs.” “Michael Newman”Michael Newman

13. Organizational structure A scheme consisting of units and individual officers of the company. Located by levels of importance and responsibility. Depending on the stage of company development require different approaches to build the organizational structure.

14. Subsidiary Model The most basic structural models The subsidiaries are self- contained units with their own operations, finance and human resource functions. Allowing them to respond to local competitive conditions and develop locally responsive strategies

15. Subsidiary Model The major disadvantage The decentralization of strategic decisions that makes it difficult for a unified approach to counter global competitive attacks.

16. Product Division Each product has its own division that is responsible for the production, marketing, finance and the overall strategy of that particular product globally Allows the multinational company to weed out product divisions that are not successful

17. Product Division The major disadvantage The lack of integral networks that may increase duplication of efforts across countries.

18. Area Division Each geographical region is responsible for all the products sold within its region. All the functional units for that particular region namely finance, operations and human resources are under the geographical region responsibility Allows the company to evaluate the geographical markets that are most profitable.

19. Area Division The major disadvantage Communication problems, internal conflicts and duplication of costs

20. Functional Structure Functions such as finance, operations, marketing and human resources determine the structure of the multinational company All the production personnel globally for a company work under the parameters set by the production department

21. Functional Structure The advantage There is greater specialization within departments and more standardized processes across the global network. The disadvantages The lack of inter department communication and networking that contributes to more rigidity within the organization.

22. Matrix Structure Overlap between the functional and divisional structures. Dual reporting relationships in which employees report both to the functional manager and the divisional manager. Involve cross-functional teams from multiple functions such as finance, operations and marketing

23. Matrix Structure The advantage There is more cross-functional communication that facilitates innovation  The decisions are also more localized. The disadvantage More confusion and power plays because of the dual line of command

24. Transnational network Evolution of the matrix structure More on horizontal communication. Information is now shared centrally This structure is focused on establishing "knowledge pools" and information networks that allow global integration as well local responsiveness.

26. In the 1980s and 1990s In 21st Century Globalization was largely driven by economies of the developed world United States, Western Europe and Japan Large multinational companies headquartered in developing countries China, Brazil and India This trend is becoming more pronounced which impacted many developed economies.

27. Exhibit 1: Cross Border Purchases by Developed and Developing Economies

28. Exhibit 2: Cross Border Purchases by Emerging and Transition Economies in Developed Economies

29. Exhibit 1 and 2 show: The share of cross-border buy-side transactions by developing economies. Asian developing countries being the major force for this change.

30. Some major mergers and acquisitions across sectors like oil and gas, mining, automotive and financial services E.g. The Indian conglomerate Tata Sons' acquisition of UK- based Corus Steel and Jaguar Land Rover China-based Geely Automotive's takeover of Swedish auto giant Volvo Mexican cement manufacturer CEMEX's acquisition of Australian cement company Rinker Group.

31. According to the United Nations Conference on Trade and Development (UNCTAD): There were 80,000 transnational corporations (TNCs) in 2009 During the last few years, while developed countries accounted for the bulk of the TNCs across the globe, a paradigm shift has been occurring. The transnationalisation of emerging market firms reflects the maturity in their business processes and their increasing appetite for international growth.

33. The diagram shows the network of the 295 TNCs among the top holders in 21th century

34. Exhibit 3: Motivations for Investments for Firms from Emerging Markets

35. To reduce the risks associated with being overdependent on limited market presence To increase their market presence as well as achieve economies of scale

36. E.g.  In 2006: the China-based TCL Corporation's acquisition of Thompson and the acquisition of US-based IBM's PC business by China's Lenovo  In 2007, the leading Mexico-based cement manufacturer CEMEX gained a controlling stake in Australian counterpart Rinker Group for USD 14.7 billion => CEMEX also expanded its geographic presence in Australia and the Asia Pacific region

37. Many enterprises from emerging countries are in search of natural resources across the globe. They acquire strategic resources worldwide for: oil, minerals and other raw materials => transnational routes also help enterprises internationalize and integrate their production facilities globally.

38. E.g. In 2006, Brazilian mining giant Vale acquired Canadian- based Inco, the largest nickel mining and processing company, thus expanding its production facilities in North America. Indian petrochemical giant Reliance Industries Ltd acquired the shale gas assets of US-based Atlas Energy for almost USD 3.5 billion in early 2010 => Reliance now has the first mover advantage in exploring the

39. Corporations need to operate more efficiently and to increase productivity by vertically or horizontally integrating their processes. Many firms from the emerging markets are: Reassessing their internal operations and their roles in the global value chain. Investing in the developed economies to achieve efficiencies.

40. E.g. In 2006, the acquisition of UK-based Corus Steel by Indian steel manufacturer Tata Steel Brazilian aircraft manufacturer Embraer acquired aircraft maintenance, repair and operations (MRO) service provider OGMA in Portugal.

41. Developing markets had a construct to be among the top economies by middle of the 21st century. In line with their growth ambitions, many of these emerging market firms have expanded their horizons to developed economies and started to take the route of cross-border acquisitions. Be able to leapfrog the maturity curve => to match the needs of the developed markets in terms of : Technology and management advancements, Quality standards and certification, Most importantly, to overcome the psychological barriers with respect to brand perception.

42. E.g. The Asian giants (China and India) along with Latam (Brazil) would dominate the cross-border firm creation scene => lead to a changing landscape of global economics, where there would be a gradual shift of corporate appetite for transnational growth from the developed to the developing markets

43. eSys Information Technologies Pvt. Ltd. is the world-leading information technology company, and business process outsourcing organization that envisioned and pioneered the adoption of the flexible global business practices that today enable companies to operate more efficiently and produce more value. Efficiency, reach and adaptability are the core values that define eSys business model for IT distribution. Since its incorporation in Singapore in the year 2000, eSys has set a scorching pace to become a major IT component distribution network in Asia and Europe with 32 in-country subsidiaries and more than 100 points of presence. With the presence in 32 countries and across 100 plus outposts the entire enterprise is run on one simple phrase: “Constant innovation that maximizes efficiencies to deliver enhanced value to our customers.” eSys PC has already been launched in India, Middle East, Korea, UK and USA.

44. “Relax,it’s FedEx.” “We live to deliver.”

45. Introduction: FedEx provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. Integrated business applications through operating companies competing collectively and managed collaboratively, under the respected FedEx brand..

46. Functional Structure The FedEx Corporation is the parent company over all the others, which provide support to all of the other companies : FedEx Express FedEx Ground FedEx Office FedEx Freight FedEx Custom Critical FedEx Trade Networks FedEx Supply Chain FedEx Services

47. The original overnight courier services, providing next day air service within the United States and time- definite international service Guaranteed day- definite delivery within Canada and the United States at a cost savings as compared to time- definite FedEx Express. Less than truckload (LTL) and other freight services. Details of Functional Structure Units & Logos

48. Offers copying and digital printing, professional finishing, document creation, Internet access, computer rentals, videoconferencing, signs and graphics, direct mail, Web-based printing, and FedEx shipping. Provides services relating to customs, insurance, and transportation advice. Delivers urgent, valuable, or hazardous items using trucks and chartered aircraft.

49. Provides logistics services including Critical Inventory Logistics, Transportation Management Services, Fulfillment Services, etc. Provides global marketing, planning and information technology(IT) services for the other FedEx operating companies.

50. 1. Asia Pacific (APAC) 2. Canada 3. Europe, Middle East, Indian Subcontinent and Africa (EMEA) 4. Latin American and the Caribbean (LAC) 5. United States FedEx Express: A wholly owned company of FedEx, which is divided into five global regions:

51. FedEx Ground Area

52. FedEx Timeline 1900-1969 1913:C.J. Tower & Sons began operation as a customs broker in Niagara Falls, N.Y. 1947: Roberts Cartage (now FedEx Custom Critical) is founded as a pickup and delivery trucking company in Akron, Ohio. 1966: Viking Freight Inc. (now FedEx Freight West) is founded in San Jose, Calif. 1970-1979 1971: Federal Express Corporation is founded in Little Rock, Ark. 1973,relocatesd operations to Memphis, Tenn. 1978: listed on the New York Stock Exchange; ticker symbol is FDX. 1980-1989 1983: FedEx becomes the first U.S. company to reach revenues of $1 billion without merger or acquisition. 1989: FedEx purchases Flying Tigers to expand its international presence.

53. 1990-1999 1990: FedEx becomes the first company to win the Malcolm Baldrige National Quality Award in the service category. 1994:FedEx officially adopts "FedEx" as its brand for recognition as the worldwide standard for fast, reliable service. 1998:FedEx acquires Caliber System Inc. and creates FDX Corporation 2000- present 2000: Parent company FDX is renamed "FedEx Corporation." Services are divided into companies that operate independently yet compete collectively. 2007:FedEx Kinko’s introduces Print Online, an innovative Web-based printing tool allowing customers to access the chain’s professional printing services from anywhere in the United States.

54. Values People: We value our people and promote diversity in our workplace and in our thinking. Service: Our absolutely, positively spirit puts our customers at the heart of everything we do. Innovation: We invent and inspire the services and technologies that improve the way we work and live. Integrity: We manage our operations, finances and services with honesty, efficiency and reliability. Responsibility: We champion safe and healthy environments for the communities in which we live and work. Loyalty: We earn the respect and confidence of our FedEx people, customers and investors every day, in everything we do.

55. Strategy Compete collectively by standing as one brand worldwide and speaking with one voice. Operate independently by focusing on our independent networks to meet distinct customer needs. Manage collaboratively by working together to sustain loyal relationships with our workforce, customers and investors.

56. Business Profit and Development RevenueUS$US$ 34 billion (2010) Operating income US$US$ 2.075 billion (2008) Net incomeUS$US$ 1.2 billion (2010) Total assets US$US$ 25.633 billion (2008) Total equity US$US$ 14.526 billion (2008) Employees280,000+ (2009)

57. Achievements 2001-2010: FedEx has ranked among the top 20 in the FORTUNE Most Admired Companies list. 03/2011 FedEx ranks no.8 on FORTUNE’s World’s Most Admired Companies List