A transnational company is an organization or company that is established or has multiple franchises in various countries around the world; In other words, they are located in other countries and carry out their commercial activities not only in sales and purchases, but also in manufacturing in the countries that have been established.
The growth in the number and size of transnational companies has generated controversy due to their economic and political power , regarding their mobility and the complexity of their operations. Some politicians argue that transnational corporations do not show loyalty to the countries in which they are incorporated, but act exclusively in their own interest.
The US corporations have several reasons for establishing a corporate presence in other countries. One possible reason is a desire for growth where the corporation may have come into a group of meetings for domestic demands where they can anticipate little additional growth. A new foreign market could provide opportunities for new growth.
The transnational company has two reasons that can be, One is the prevention of competition, where the method is safer to avoid real or potential competition from foreign companies in the acquisitions of those businesses. The other reason for the establishment of subsidiaries in other nations is to reduce costs, mainly through the use of cheap labor in developing countries.
A transnational corporation can keep costs low in order to move part or all of its production facilities abroad.
