PART III

TRANSNATIONAL CORPORATIONS
7 The role of transnational corporations in the globalisation process
Grazia Ietto-Gillies1

1. Introduction Globalisation is a complex phenomenon which is more in the nature of a process than a state of affairs. There have been several attempts at definition (McGrew, 1992; Oman, 1996; Castells, 1996; Giddens, 1999; Held et al. 1999).2 Most definitions boil down to the fact that globalisation is both a process of geographical/spatial outreach and of an increased degree of interconnectedness and interdependence between people, groups and institutions based in different countries of the world. As a process of spatial outreach it is not new and has long historical antecedents (Held et al., 1999). Nonetheless it is argued in this chapter that the current process is considerably different from any previous process of outreach. One of the major differences is seen in the role that transnational corporations (TNCs) play in the globalisation process. The chapter proceeds in section 2 with an analysis of the salient characteristics of the globalisation process. The third section considers the role of TNCs in cross-border transactions. Section 4 develops the argument that the TNCs are a dominant cause of the globalisation process. Section 5 considers the wider policy implications of this perspective and the last section concludes. 2. Salient characteristics of globalisation The current globalisation process is characterised by both qualitative and quantitative aspects and it differs from previous outreach processes in many of these aspects. The process is cumulative and thus the various aspects and mechanisms reinforce each other. Among the qualitative aspects of globalisation the following play an important part: l l

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Breadth of change. The changes now involve a variety of fields or ‘domains’ (Held et al., 1999) ranging