The Digital NavigatorEG
Transnational Media and Foreign Direct Investment
The Transnational Media Corporation
The transnational corporation is a nationally based company with overseas operations in two or more countries. One distinctive feature of the transnational corporation (TNC) is that strategic decision making and the allocation of resources are predicated
upon economic goals and efficiencies with little regard to national boundaries. The TNMC is the most powerful economic force for global media activity in the world today. Through a process of foreign direct investment, the TNMC actively promotes the use of advanced media and information technology on a worldwide basis. It has
become a salient feature of our present-day global economic landscape.
Foreign Direct Investment
Foreign Direct Investment (FDI) refers to the ownership of a company in a foreign country. This includes the control of assets. As part of its commitment, the investing company will transfer some of its managerial, financial and technical expertise to the foreign owned company. The decision to engage in FDI is based upon the profitability of the market, growth potential, regulatory climate and existing competitive situation. The TNMC is arguably better able to invest in the development of new media products and services than are smaller, nationally based companies or government supported industries. There are four reasons that help to explain why a company engages in FDI. They include: 1) Proprietary Assets and Natural Resources 2) Foreign Market Penetration, 3) Research, Production and Distribution Efficiencies and 4) Overcoming Regulatory Barriers to Entry.
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