Essay About Local Company And Politics Coca-Cola Origins

Business Administration
Chapter 6Globalization Process of integrating the world through commerce, technology, culture and politics Coca-Cola Origins Invented in 1886 by a Civil War officer Dr. Pemberton (Pharmacist) Started selling it to soda fountains in Atlanta (local company) When inventor died in 1888 rights to formula were acquired for $2,300 and new owner soon formed Coca-Cola Company and began selling “Coke” Global Coca Cola Today Coca-Cola Company (CCC) is the world’s largest manufacturer, distributor, and marketer of soft-drink concentrates and syrups. Sold in more than 200 countries– Main markets outside of U.S = Mexico, Brazil, Japan and Germany 62% of earnings come from outside of U.S. 1.5 BILLION servings/day Business strategy = “think global, act local” Designed to put responsibility and accountability in hands of those closest to the market Coca-Colonization • “The Coca-Cola Company has been a target because it is a high profile American company • Attacked in Afghanistan after first U.S. raids • CCC illustrates the uniqueness of a Multinational and the necessity that this type of company has to develop strategies to deal with problems on a global scale The acceleration of globalization The factors that drive the acceleration of globalization: Improved communications Improved transportation systems The rise of major transnational corporations Social and political reforms The rise of international financial and trade institution (e.g. World Bank, IMF, WTO) Major players on Globalization Multinational Corporations: MNCsNon-Governmental Organizations: NGOs International financial & Trade Institutions: • World Bank International Monetary Fund (IMF)World Trade Organization (WTO) Multinational Corporations (MNCs) a.k.a. Multinational Enterprises (MNEs)/ Transnational Corporations (TNCs) What exactly makes a company an MNC? According to the United Nations: firms that control assets abroad: –  Export products to foreign countries –  Establish sales organizations abroad –  License use of patents and technology to foreign firms that sell the MNC’s products –  Give foreign production facilities substantial autonomy but still reserves some important decisions for the home office (Headquarters) –  Decentralize authority throughout the company so that functions at home and abroad are done by executives from different countries MNCs (II)-79,000 MNCs operate in the modern global economy -Most global commerce is carried out by a small number of powerful firms NGOs (I) Most of these organizations were created in order to deal with issues caused by MNCs, particularly: – Environmental risk – Worker rights– Labor practices– Human rights – Community development NGOs (II) Since early 1900s # of international NGOs has grown to approximately 20,000 This growth has been attributed to several factors: New global economic & political relationships Openness in post-Cold War world that allows for more views to be expressed NGOs are now legitimate stakeholders in MNCs decisions due to their power and influence International financial & trade institutions The World Bank • Provides economic development loans to its member nations.• Funds used mainly for roads, dams, power plants, pipelines, and other infrastructure projects.