Corporate players in the international business activity:
Multinational corporations play an important role in the international economic relations now.
There are several types of the multinational corporations:
1. There are state trade organizations, which appear to be a state property, thus, the state owns 100% of the enterprise. Such kind of companies are created and governed under the public law and in accordance with the general private corporations' law of a state;
2. There are commercial corporations, which also are organized under the civil, commercial and private law of a certain state;
3. There are entities known as "international public corporations"; "intergovernmental corporations of private law" or public enterprises, which are established by several countries, according to their commercial law and international law. As a matter of fact, such type of corporations emerges only to serve the interests of several states. (Among them are: INTELSAT (International Telecommunications Satellite System), the Bank of International Settlements and Scandinavian Air Lines).
4. There are also enterprises, which consist of a system of private national corporations. These corporations are created by mutual consent of each company; on the basis of the common investment fund and under the general managerial control;
5. There are also international organizations, which play a governmental regulatory role in the international activity. (For instance, the International Bank for Reconstruction and Development)1
On the international level, the business activity is characterized as more complex, more demanding, more profitable, however, more risky.
First of all, the effectiveness and profitability of a business, which operates within the limits of one country, depends upon its internal state policy and internal state legislation; however, the Multinational Corporations' activity depends very much upon the legislation, the internal and foreign policy of several countries simultaneously.
Secondly, it is known that an organization has to increase, develop and expand. If this does not happen, your competitors will leave you behind. Therefore, in order to expand its activity, an International Corporation must conquer new markets in these countries, where there is much less pressure of the competitive activity. However, if a country opens its frontiers to more stronger foreign companies, it takes the risk that the important domestic industries will be quickly swept away by a growing demand for foreign goods; also this tendency may lead to the politically unacceptable dependence on foreign sources of production. To avoid adverse conditions in its politics and domestic manufacture, the country, either establishes tariffs, which place a price disadvantage on imported goods, or quantitative restrictions, which put a flat limit on the amounts of the foreign goods that may be imported.
As you see, the instability, uncertainty and bureaucratic administrative apparatus can impose such restrictions, which may considerably discourage trade and manufacturing of the foreign products, and not all multinational corporations can stand such "natural selection" and struggle for their position on the new market.