International markets give impetus to change transnational corporations as they evolve to fit the modern era of globalization
As the global market is maturing, China’s transnational corporations (TNCs) are transforming into modern global enterprises, Wang Zhile, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said at the launch of his new book, New Manufacturing Era, the Economic Information Daily reported.
Based on traditional theory, Wang noted that TNCs had been a tool for developed countries to engage in external expansion and plunder resources, but this theory is now outdated. It no longer has relevance to ventures by Chinese companies overseas or in understanding why China should be active in pushing its enterprises to expand abroad.
To gain more understanding, innovations in the theory are necessary, meaning that the definition of TNCs should be revised, as currently, traditional multinational companies are evolving into modern global enterprises.
According to Wang, global markets give impetus to TNCs to change, for example, one such change is in management - the development strategy of enterprises is evolving from a centralized management structure to one of global network governance. These corporations will also have a duty to globalization, since employees, capital, or other commercial segments will mix with those of entities overseas.