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Asian Pacific Multinational enterprises in the Global Economy Essay


The growing trend in the globalization of trade across the world has influenced the manner in which organizations are growing towards the international paradigm. According to Ahearn (2011), current statistics indicate that the global economic power is gradually shifting from developed economies, including Europe and the United States, to fast-growing economies, especially the Asian Pacific nations.

Asian Pacific nations have developed exponentially over the years with multinational corporations characterized by intense business activities influencing the global economy (Ahearn, 2011). Led by China and Japan, countries within the Asian Pacific Zone are increasingly attracting Foreign Direct Investment (FDI) that contributes to growth in the world economy.

Apart from accelerating economically, many of the Asian nations are investing, procuring, and operating new multinational businesses across the world (Bennett, 2002). However, the power of Asian Pacific multinational corporations in the global economy remains underestimated. Hence, this essay seeks to examine the influence of the Asian Pacific multinational corporations on the international economy.

Asian Pacific Multinational Corporations

Among the fast-emerging market economies, it is essential to understand the major countries in the Asian Pacific zone that significantly influence the growth of the global economy through trade (Nigam & Su, 2010). China, Japan, Taiwan, and Korea are among the major players in the Asian economy, and their multinational corporations are diverse across the world.

Asian pacific multinational corporations influence the global economy through their trading activities that are exceptional. According to Pananond (2007), the Asian Pacific corporations have unique business strategies, business practices, business aims, and management techniques that significantly influence their international economic power.

When considering their direct contribution to the global economy, multinational corporations from the Asian pacific zone have different business strategies compared to their counterparts, which are European and United States (Ahearn, 2011). Types of businesses, industrial practices, business investment techniques, technology, trading policies and regulations, innovation approaches, management behaviors, and corporate operations of the Asian Pacific companies differ from their potential business rivals.

Chinese Multinational Corporations

China is among the fastest-growing economies within the Asian Pacific zone, which is currently contributing to the transformation of the global economy through its expanding trade and manufacturing practices (Dee, 2006). China is growing economy and economic powerhouse that continues to attract millions of international investors in the business segment, and its corporate firms dominate the global business paradigm.

Chinese multinational firms augment investment practices across Europe and within the United States; hence, increasing global corporate growth (McGrew, 2008). China has different targets, strategies, business practices, and corporate policies that differ from their trade and business counterparts, European and the United States. China has domestic business policies renowned by both the private and public sectors, which influence its contribution to the international economy (McNally, 2013).

China’s corporations contribute significantly to its internal economy and international economy, understanding of their influence on economic growth is essential. In a few years, Huawei technologies seem to dominated multinational networking and telecommunications sector and has contributed to immense economic growth for China.

Strategies of China and Chinese Corporate Practices

China and its corporate practices are unalike from their rivals, an issue that contributes to their influence on their economic growth and that of other nations like the United States (McNally, 2013). Chinese corporations follow their national trading and business practices that have their basis on the idea of state capitalism in marketing strategies.

While the United States and Europe support the notion of establishing organizations that enhance socioeconomic well-being, China is re-emerging as a powerful and dynamic supporter of state capitalism. McNally (2013) states that “China represents a hybrid that is now the leading form of refurbished state nationalism” (p. 5).

Several Chinese multinational corporate organizations operating within China, the United States, and Europe are practicing their businesses following the state capitalism model. Using the state centered-planning in controlling Chinese trade and multinational Corporations, the practice of state capitalism enables China to conquer the international trade boundaries (McGrew, 2008). Although Chinese capitalism attracts controversial discourse, the model significantly influences the global economy.

Chinese state capitalism serves the modern trends in the globalization efforts, with its multinational corporations contributing significantly to competition within the global markets (McGrew, 2008). Many of the Chinese multinational corporations are private organizations serving through state-corporate policies with their main aim being the maximization of profits from the international markets.

China’s spirit of capitalism puts multinational corporations into the global front through influencing market trends, balancing economies, enhancing trading, and influencing global financial markets. Through state capitalism that influences the operational behavior of many Chinese multinational firms, business policies in China seek to promote low-cost investments in major industries.

Akin to other East Asian forerunners, China’s multinational corporations use programs of government, which are well-subsidized investments in major leading business industries (Dee, 2006). The capitalism of Chinese multinational firms focuses on enhanced exportation and suppressed domestic utilization of homemade products, purposely to encourage the maximum profit making, promote high savings, and increase investment rates.

China’s capitalism pushes for the creation of a solitary international capitalist economy where multinational corporations organize business productions and control marketing. According to McNally (2013), “China’s capitalism, thus, has assimilated multi-firm, multinational global production and knowledge networks” (p. 5).

Through subsidized investment in leading industries, including telecommunication, gas, and oil, China’s multinational corporations push for foreign direct investment (FDI). China has frequently attracted FDI from leading western multinational corporations, since its domestic economy has become a fundamental component of the western-based economies (Pananond, 2007).

China’s multinational corporations have manipulated the inward and the outward FDI rates, with foreign companies investing in China and China’s firms investing across the world. The approach of intensified export of homemade products, oppressed consumption of homegrown products, and frustration of imports of major industrial products enables China’s multinational firms to control major global markets (Dee, 2006).

Compared to the western multinationals that emphasize on the consumption of their homemade products, balance exportation and transportation, highly emphasized intellectual property rights, China’s multinational firms foster capitalism.

Chinese multinational corporations are sensitive to international labor markets and demands across the world. Considered as an unethical leadership, Chinese multinational corporations have been utilizing different labor standards that the Western and American companies feel are unjust (Walsh & Zhu, 2007). Market capitalism utilized by the Chinese corporations does not promote excessive utilization of labor.

As opposed to the European and American companies, China discourages high labor turnover within its multinational organizations, as a means of enhancing profitability and reducing operational costs. Chinese multinationals believe that effective marketing systems should govern labor and capital markets not only through managing market-related issues but also through coordinating labor trends (Collinson & Rugman, 2007).

Chinese multinational encourage laborsaving strategies and low labor turnover to avoid excessive expenditure on wages and maintenance of employment. Employee retention and attraction of highly skilled labor at cheap recruitment standards normally assists Chinese multinationals in managing wage bills.

Korean multinationals and the Western/American Corporations

As an emerging economy, Korea has also been very practical in utilizing outward direct investment (ODI) that influences its economic power. Multinational corporate practices and policies utilized by most of companies from the East Asian countries are normally similar, with the aspect of capitalism practically eminent (Ghemawat, 2003). The Korean government encourages its functional firms to venture abroad to acquire new technologies and skills.

Korea is among the Asian economic powerhouses with increasingly flourishing stock markets, direct foreign investment, and strong foreign business influence being the foremost aspects of its enhanced economy (Ghemawat, 2003). Korean firms operate differently from their European and American multinational counterparts, a central factor that makes Korea a giant economy within the Pacific Asia.

For the Korean multinational corporations operating within Europe and America, knowledge-sharing relationships, enhanced technological networks are major management and business operation strategies utilized (Ghemawat, 2001). Akin to its Asian counterparts, Korea’s public policies on international trade practices and ODI play a significant role in multinational businesses.

Korea’s influence on its multinational corporation trading practices greatly influences the economic trends across the continents. The government of Korea encourages multinational corporations to engage in ODI through more risky investment strategies, rather than depending intensely on government funding (Ghemawat, 2001).

Aggressiveness in these firms frequently increases ODI, which further influences global economic growth. Korean multinational corporations emphasize on broad international market research that normally seeks to improve their market penetration strategies across the world (Ghemawat, 2001). In addition, Korean firms have well-established research institutions within their companies that complement the acquisition and sharing of market information.

Supported by enhanced information technology that Korea has ventured into, multinational corporations established within Korea, and around Europe and America are flourishing in global markets.

The business nature of global information capitalism enables Korean firms to conquer the global economic sphere (Narula, 2006). While the European and the American corporations have specialized in the domestic research to identify the needs of their own population, Korea and other Asian states have built interest in potential markets across the world.

Similar to the Chinese corporate strategies, Korea utilizes the corporate and state capitalism approach for their multinational corporations, with their products, utilities, and services targeting developing economies, especially in Africa (Narula, 2006). Venturing into new investments within emerging and underdeveloped economies significantly helps Korean and other Asian corporations in maneuvering competitive global markets.

The business practice of such kind also enhances economic growth as it improves the state of developing economies and international trade links between nations (Nigam & Su, 2010).

As opposed to the western and American states, many multinational corporations of these nations normally emphasize on settling the demands of the domestic market, most of which developed a long time ago. According to Nigam and Su (2010), this business practice normally contrasts the strategic management practice, which should always focus on utilizing new market opportunities and encouraging contemporary innovations.

Since economic crunches have intensified in the contemporary era and many governments have failed to recover from financial crisis, civilians are relying on cheaply designed products that favor their immediate conditions (Nigam & Su, 2010). Korean and several other Asian multinational corporations seem to have utilized the growing opportunity for economically favorable electronic, telecommunication, and technological products (McGrew, 2008).

While the American and European firms raise concerns over the failure of Asian countries to respect global trading policies, including disproving intellectual property principles, Korean firms are intensifying ODI. Many of the European and American multinational corporations dealing with major industrial products have undermined markets in the third world, while the Asian multinational utilize these markets.

Coupled with government policies that seem strictly follow the World Trade Organization (WTO) regulations, Western and American multinational corporations fail to capture growing markets in developing economies (McGrew, 2008). By emphasizing on new investments abroad, rather than exploiting on domestic opportunities like the American and Western multinationals, Asian multinationals occupy enormous global market share.

Multinational Corporations of Japan

The strategies employed by multinational organizations from Japan, Hong Kong and Taiwan are relatively similar to those utilized by their fellow Asian counterpart, but very different from those used by the Europeans and Americans (Brown, Rugman & Verbeke, 1998). The main economic power of the Asian countries comes from their ability to venture in leading industrial commodities that include electronics, machinery, telecom, and other technological devices.

Although Japan has not intensified direct outside investment as compared to China, multinational corporations that deal with leading industrial products find export-oriented strategy as a crucial international corporate practice (Wu, 2008). Japanese companies develop highly demanded industrial products and emphasize on exports and foreign markets located within both developed and developing economies.

Critical emphasizes and specialization of automotive products that are in constant demand across the world gives Japan a unique commodity-based competitive advantage over the Western multinationals (Wu, 2008). While most of the multinational corporations from America slacked in the production of machinery and automobiles during post-financial crisis, Japan maintained.

Japan has been trading on the notion of unique technology, which rarely prevails in the Western and American multinational corporations, and this presents its corporations with a unique opportunity to survive in these heavily competitive markets (Brown, Rugman & Verbeke, 1998).

Apart from simply acquiring investments around the Western and American premises, Japanese corporate organizations realize that integrating unique technological network is essential to maneuver in these competitive markets. Technological upgrading, a strategy of many Japanese multinationals enables them to triumph easily through the developing economies across Asia, Africa, and within developed economies (Ghemawat, 2001).

Lately, Mitsubishi Corporation is the main Japanese source of automobile innovation, with the company seeking to shift from old technologies and integrate green technology. This approach enables Mitsubishi gain international attention as automotive companies seek to replace fuel guzzlers in the car market. Compared to their fellow counterparts in the United States and Europe, innovation and utilization of talented workforce that is technologically suave, is a competitive advantage for many Japanese firms.

Canon, Mazda, and Sony are major international firms that originated from Japan, while Toyota and Nissan are spreading across the developing economies, including the vastly growing Africa (Brown, Rugman & Verbeke, 1998). Although limited to expanding and exploring opportunities that emerge specifically within Asia, campaign on intensive utilization of export-led strategy among Japanese multinational firms is becoming eminent, with exportation of leading brands and commodities being crucial.

However, Japanese export success does not rely on any commodity produced on counterfeit production, but depends on specific, few, and recognized industries that are renowned for bringing significant economic impact (Wu, 2008). The few essential sectors promote most of the outward FDI and are responsible for the globalization of the Japanese economy.

While the few sectors in the Japanese firms manage to internationalize the country towards the global economic sphere, Japanese firms also balanced their role within their domestic markets (Bennett, 2002). This is in contrast with many of the American and Western multinationals, which focus on exploring and utilizing regional home market rather than international competitiveness.

Japanese multinational corporations have emphasized on management techniques that understand the imperativeness of appreciating international differences within developed and developing nations (McGrew, 2008). Through such management techniques, Japanese firms have been introducing commodities that suit each market economically and culturally.

Across the world, with models and designs of these products produced, Japanese multinational corporations like Mitsubishi corporations, rely on the economic ability of the targeted consumers. Japan international firms produce an assortment of highly valuable electrical, automobile, and telecommunication commodities, while considering the cost and ability of the targeted markets (Narula, 2006).

When these firms export expensive products to America and Europe as their seasoned potential markets, they also consider developing markets that require relatively low-priced products. A perfect corporate case is Mitsubishi Corporation that has influenced automobile business in developed economies, including the United States and across the United Kingdom. Japanese Mitsubishi Corporation has also extended its operations to developing nations, including those in the African continent.


Government policies, firm aims, corporate operation practices, and management practices across Asian countries differ from their rivals across the Western economies and America. The business intentions and practices are different in their approaches, as Asian multinationals use different trade and business strategies compared to American and Western multinationals.

Contrary to most of the Asian economies, multinationals from Western and American states utilize home-based markets than foreign direct investment, with production and investment in Asian companies utilizing export strategies. China, Korea, Taiwan, and Japan are all endlessly seeking international triumph through exploration of new markets in emerging economies within the second and third world nations.

While American and Western nations utilize high labor turnover in most of their multinational organizations, Asian multinationals utilize low-wage labor and emphasize on employee retention. Asian countries have welcomed free trade across their nations, but with flexible regulations governing trading polices and principles.


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