The concept of transnational corporation, history of their development

The exact standard definition of the transnational corporation does not exist till now. Terminological diversity of the concept both in English-speaking (or Uzbek), and in the foreign literature remains. It can be seen in various variants of word combinations - a corporation, a company, an enterprise, a firm in a combination with adjectives - transnational, multinational, international, global etc. This terminological diversity of natural, because it reflects the attempt to find an adequate reflection of the new features that are in the field of international economic relations have gained this monopoly. Transnational corporations are basically “national” on the capital and “international” on the field of activity. The part "trans" emphasizes this quality - the border crossing of goods and capital flows. I will give several definitions for TNC:

Transnational corporations (TNCs) are incorporated or unincorporated enterprises comprising parent enterprises and their foreign affiliates. A parent enterprise is defined as an enterprise that controls assets of other entities in countries other than its home country, usually by owning a certain equity capital stake. An equity capital stake of 10% or more of the ordinary shares or voting power for an incorporated enterprise, or its equivalent for an unincorporated enterprise, is normally considered as the threshold for the control of assets. (In some countries, an equity stake of other than 10% is still used.

Transnational corporation (TNC) - a monopoly union (concerns or multinational corporations), in which many companies are combined with one or more branches of the world economy, which are engaged in manufacturing and trading activities that transcend national countries.

TNC - a company (financial-industrial groups), which owned or controlled by complexes of production or service outside of the country in which these corporations are based, have an extensive network of branches and subsidiaries in different countries and occupy a leading position in production and sales of a product.

Transnational corporation - the kind of form of the international association of capitals when the parent company has affiliates in many countries, carrying out coordination and integration of their activity.

The legal regime of TNCs suggests business activity in different countries through the formation of branches and subsidiaries. These companies have a relatively independent service production and marketing of finished products, research and development, services to consumers, etc. In general, they comprise a large single production complex ownership over the equity only representatives of the country's founding. At the same time, branches and subsidiaries can be mixed enterprises with the participation of mainly national home country.

Distinctive lines of the transnational corporation are:

1) annual turnover is usually higher than $ 100 million;

2) have branches in more than 6 countries;

3) on the international status of the firm shows an indicator such as size percent of its sales, its products sold outside the country of origin of the company;

4) structure of its assets, in some foreign researches to the international corporations carry the companies having 25 % of actives abroad

The development of transnational corporations has passed historically a number of stages. In the first period of the origin of TNCs (the end of XIX century.), they have undergone very significant transformation. TNCs’ first generation has been largely associated with the development of raw materials of former colonies, which gives the basis to define them as «the national-raw transnational corporations».

According to its organizational and economic forms and mechanisms of functioning, there were cartels, syndicates and the first trusts. Then on the world stage there were trust types of TNCs which were associated with the production of military-technical products. Having started its activity in the period between two world wars, some of those second generation TNCs maintained their position in the global economy and after World War II. They produced weapons and ammunition.

In the 60th years, an increasingly prominent role of TNCs has begun to play the third generation, which was widely used to achieve scientific and technological revolution. These techno-consumer companies: corporations and conglomerates.

In the 60 – 80th years in the activity of TNCs organically incorporated the elements of national and foreign production: realizations of goods, management and organization of personnel, research of marketing and after-sales service.

The third generation of transnational corporations promoted to spread the achievements of scientific and technological revolution in the peripheral areas of the world economy and, most importantly, economic preconditions for the occurrence of international production with a single market and the information space, the international capital market and labor, scientific and technical services. Their goal was to conquer markets, sources of raw materials and spheres of application of capital.

In the early 60's the global transnational corporations of the fourth generation have gradually appeared and have affirmed. Their distinguishing features are:

· planetary vision of the markets and implementation of competition on a global scale, section of the world markets with a few global multinational corporations;

· coordinate the actions of their affiliates on the basis of new information technologies;

· flexible organization of each production site, adaptability corporate structure, uniform accounting and auditing;

· integration of its subsidiaries, factories and joint ventures into a single global network management, which, is integrated with other networks of TNCs;

· implementation of economic and political influence in the state in which they operate TNCs.

Their strategy is characterized by their innovative aggressiveness, dynamism and a withdrawal from single industry structure, constant improvement of internal corporate structure, aiming at the conquest of the key global economic position in the production and marketing.

As for the structure of transnational corporations, it is following:

A parent company is an incorporated or unincorporated enterprise, or group of enterprises, which has a direct investment enterprise operating in a country other than that of the parent enterprise. An affiliate enterprise is an incorporated or unincorporated enterprise in which a foreign investor has an effective voice in management. Such an enterprise may be a subsidiary, associate or branch.

A subsidiary (an affiliate) is an incorporated enterprise in the host country in which another entity directly owns more than a half of the shareholder's voting power, and has the right to appoint or remove a majority of the members of the administrative, management or supervisory body.

An associate is an incorporated enterprise in the host country in which an investor owns a total of at least 10%, but not more than half, of the shareholders’ voting power.

A branch is a wholly or jointly owned unincorporated enterprise in the host country which is one of the following: a permanent establishment or office of the foreign investor; an unincorporated partnership or joint venture between the foreign direct investor and one or more third parties; land, structures (except structures owned by government entities), and /or immovable equipment and objects directly owned by a foreign resident; or mobile equipment (such as ships, aircraft, gas- or oil-drilling rigs) operating within a country, other than that of the foreign investor, for at least one year.

A joint venture involves share-holding in a business entity having the following characteristics: the entity was established by a contractual arrangement (usually in writing) whereby two or more parties have contributed resources towards the business undertaking; the parties have joint control over one or more activities carried out according to the terms of the arrangements and none of the individual investors is in a position to control the venture unilaterally.