Multinational Corporation

Multinational, international, global, or transnational corporations are those that operate in more than one country—not simply exporting goods from one country to another, but offering services in multiple countries or operating production facilities in more than one country. Because the demands of their businesses require them to operate under different conditions within different borders—abiding by local laws and serving different customer bases—their profits and productivity are affected by international matters to a greater degree than those of single-nation companies. Combined with their generally greater wealth, this has tended to involve them in international politics and to make them objects of suspicion. In popular speech, “the corporations” generally implies “the multinational corporations,” and especially those that export cultural products from the United States or the West to the rest of the world, or those that control great amounts of natural resources, like the oil companies. These are the companies that have a greater than average impact on world affairs.

The British East India Company is widely considered the first multinational corporation, but it was the advances of the Industrial Revolution—particularly in manufacture and transportation—that paved the way for the modern multinational, just as the internet and the information revolution have led to new forms of multinational operation through online ordering, business process outsourcing, and off-shoring.

Postwar Multinational Corporations

Throughout the 20th century, Americans made great strides in foreign direct investment (FDI), and World War II had a good deal to do with so many of the prominent multinational corporations having American origins. Americans had already made significant progress in reaping overseas profits from domestic innovations, like the Hollywood movies that were shown all over the world. Foreign audiences happily tolerated subtitles or dubbed-in voices in exchange for the much better production values of big-budget Hollywood movies compared to most of the local fare, which is one reason the biggest successes exported from Hollywood were those that made those bigger budgets most obvious: the action movies, thrillers, science fiction movies, and so on. At the same time, the American movie industry specialized from a very early period in the creation and promotion of movie stars, figures whose fame soon outpaced the fame of any one movie.

Other American cultural icons were exported in great numbers as well; having pioneered national advertising in the United States, Coca-Cola began selling its product to the world. Depending on the arrangement (which varied and developed over time), syrup could be manufactured in the United States and shipped elsewhere to be diluted and bottled, or the formula for the syrup could be given to Coca-Cola-owned bottling companies around the world. After World War II, when most of Europe was occupied with recovery, FDI by Americans skyrocketed, accounting for 75 percent of new FDI from the end of the war until 1960. American FDI did not diminish at that point—far from it, it has continued to grow at great rates—but non-American corporations began to engage in it more and more often, such that by the 21st century it had become a worldwide phenomenon.

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