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113-530: Nuance Communications, Inc. is an American multinational computer software technology corporation , headquartered in Burlington, Massachusetts , that markets speech recognition and artificial intelligence software. Nuance merged with its competitor in the commercial large-scale speech application business, ScanSoft , in October 2005. ScanSoft was a Xerox spin-off that was bought in 1999 by Visioneer ,

226-766: A basis in a national ethos , being ultimate without a specific nationhood, and that this lack of an ethos appears in their ways of operating as they enter into contracts with countries that have low human rights or environmental standards . In the world economy facilitated by multinational corporations, capital will increasingly be able to play workers, communities, and nations off against one another as they demand tax, regulation and wage concessions while threatening to move. In other words, increased mobility of multinational corporations benefits capital while workers and communities lose. Some negative outcomes generated by multinational corporations include increased inequality , unemployment , and wage stagnation . Raymond Vernon presents

339-508: A corporation invests in a country in which it is not domiciled, it is called foreign direct investment (FDI). Countries may place restrictions on direct investment; for example, China has historically required partnerships with local firms or special approval for certain types of investments by foreigners, although some of these restrictions were eased in 2019. Similarly, the United States Committee on Foreign Investment in

452-429: A free market system where there is little government interference. As a result, international wealth is maximized with free exchange of goods and services. To many economic liberals, multinational corporations are the vanguard of the liberal order. They are the embodiment par excellence of the liberal ideal of an interdependent world economy. They have taken the integration of national economies beyond trade and money to

565-611: A group of prominent merchants and explorers met to discuss a potential East Indies venture under a royal charter . Besides Fitch and Lancaster, the group included Stephen Soame , then Lord Mayor of London ; Thomas Smythe , a powerful London politician and administrator who had established the Levant Company ; Richard Hakluyt , writer and proponent of British colonization of the Americas ; and several other sea-farers who had served with Drake and Raleigh. On 22 September,

678-550: A hardware and software scanner company, which adopted ScanSoft as the new merged company name. The original ScanSoft had its roots in Kurzweil Computer Products . In April 2021, Microsoft announced it would buy Nuance Communications. The deal is an all-cash transaction of $ 19.7 billion, including company debt, or $ 56 per share. The acquisition was completed in March 2022. The company that would become Nuance

791-497: A hero; his circumnavigation raised an enormous amount of money for England's coffers, and investors received a return of some 5,000 per cent. Thus started an important element in the eastern design during the late sixteenth century. Soon after the Spanish Armada 's defeat in 1588, the captured Spanish and Portuguese ships and cargoes enabled English voyagers to travel the globe in search of riches. London merchants presented

904-490: A million troops to help, and by February 1991, Iraqi forces were expelled from Kuwait. Due to the oil boycott from Kuwait and Iran, oil prices rose and quickly recovered. Saudi Arabia once again led OPEC, and thanks to assistance in defending Kuwait, new relations emerged between the USA and OPEC. Operation "Desert Storm" brought mutual dependence among the main oil producers. OPEC continued to influence global oil prices but recognized

1017-682: A petition to Elizabeth I for permission to sail to the Indian Ocean. The aim was to deliver a decisive blow to the Spanish and Portuguese monopoly of far-eastern trade. Elizabeth granted her permission and in 1591, James Lancaster in the Bonaventure with two other ships, financed by the Levant Company , sailed from England around the Cape of Good Hope to the Arabian Sea , becoming

1130-568: A private fleet of 200 ships. It specialised in the spice trade and gave its shareholders 40% annual dividend. The British East India Company was fiercely competitive with the Dutch and French throughout the 17th and 18th centuries over spices from the Spice Islands . Some spices, at the time, could only be found on these islands, such as nutmeg and cloves; and they could bring profits as high as 400 per cent from one voyage. The tension

1243-719: A relative of the Grand Mughal , though there is no evidence to suggest that it was his daughter and her retinue. The loot from the Ganj-i-Sawai had a total value between £325,000 and £600,000, including 500,000 gold and silver pieces, and has become known as the richest ship ever taken by pirates. When the news arrived in England it caused an outcry. To appease Aurangzeb, the East India Company promised to pay all financial reparations, while Parliament declared

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1356-637: A young Mughal Prince as Emperor with the Company as the de jure protectors of the Empire from their position of direct control in Bengal. This relationship was repeatedly strained as the Company continued its expansion and exploitation, however it lasted in some form until 1858 when the last Mughal Emperor was exiled as the Company was disbanded and its assets were taken over by the British Crown. In 1634,

1469-410: Is often handled through international arbitration . The actions of multinational corporations are strongly supported by economic liberalism and free market system in a globalized international society. According to the economic realist view, individuals act in rational ways to maximize their self-interest and therefore, when individuals act rationally, markets are created and they function best in

1582-865: Is usually a large corporation incorporated in one country that produces or sells goods or services in various countries. Two common characteristics shared by MNCs are their large size and centrally controlled worldwide activities. MNCs may gain from their global presence in a variety of ways. First of all, MNCs can benefit from the economy of scale by spreading R&D expenditures and advertising costs over their global sales, pooling global purchasing power over suppliers, and utilizing their technological and managerial experience globally with minimal additional costs. Furthermore, MNCs can use their global presence to take advantage of underpriced labor services available in certain developing countries and gain access to special R&D capabilities residing in advanced foreign countries. The problem of moral and legal constraints upon

1695-697: The Fancy , reached the Straits of Bab-el-Mandeb , where he teamed up with five other pirate captains to make an attack on the Indian fleet returning from the annual pilgrimage to Mecca . The Mughal convoy included the treasure-laden Ganj-i-Sawai , reported to be the greatest in the Mughal fleet and the largest ship operational in the Indian Ocean, and its escort, the Fateh Muhammed . They were spotted passing

1808-793: The Golden Hind he achieved this, and then sailed across the Pacific Ocean in 1579, known then only to the Spanish and Portuguese. Drake eventually sailed into the East Indies and came across the Moluccas , also known as the Spice Islands, and met Sultan Babullah . In exchange for linen, gold, and silver, the English obtained a large haul of exotic spices, including cloves and nutmeg. Drake returned to England in 1580 and became

1921-570: The China , India, and Japan trade routes. In 1596, three more English ships sailed east but all were lost at sea. A year later however saw the arrival of Ralph Fitch , an adventurer merchant who, with his companions, had made a remarkable nine year overland journey to Mesopotamia , the Persian Gulf , the Indian Ocean, India and Southeast Asia. Fitch was consulted on Indian affairs and gave even more valuable information to Lancaster. In 1599,

2034-601: The English Company Trading to the East Indies ) was floated under a state-backed indemnity of £2 million. The powerful stockholders of the old company quickly subscribed a sum of £315,000 in the new concern, and dominated the new body. The two companies wrestled with each other for some time, both in England and in India, for a dominant share of the trade. It quickly became evident that, in practice,

2147-682: The First Opium War in 1839, which involved a succession of British naval attacks along the Chinese coast over the course of several months. As part of the Treaty of Nanjing in 1842, the Qing were forced to give British merchants special treatment and the right to sell opium. The Chinese also ceded territory to the British, including the island of Hong Kong . The prosperity that the officers of

2260-712: The Straits of Malacca by ousting the Portuguese in 1640–1641. With reduced Portuguese and Spanish influence in the region, the EIC and VOC entered a period of intense competition, resulting in the Anglo-Dutch wars of the 17th and 18th centuries. The British were also interested in trans-Himalayan trade routes, as they would create access to untapped markets for British manufactured goods in Tibet and China. This economic interest

2373-644: The Swedish Africa Company founded in 1649 and the Hudson's Bay Company founded in 1670. These early corporations engaged in international trade and exploration and set up trading posts. The Dutch government took over the VOC in 1799, and during the 19th century, other governments increasingly took over private companies, most notably in British India. During the process of decolonization ,

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2486-729: The history of colonialism . The first multi-national corporations were founded to set up colonial "factories" or port cities. The two main examples were the British East India Company founded in 1600 and the Dutch East India Company (VOC) founded in 1602. In addition to carrying on trade between Great Britain and its colonies, the British East India Company became a quasi-government in its own right, with local government officials and its own army in India. Other examples include

2599-441: The 1770s in exchange for goods like porcelain and tea , causing a series of opioid addiction outbreaks across China in 1820. The ruling Qing dynasty outlawed the opium trade in 1796 and 1800, but British merchants continued illegally nonetheless. The Qing took measures to prevent the East India Company from selling opium, and destroyed tens of thousands of chests of opium already in the country. This series of events led to

2712-717: The British state and the Royal Navy in the form of the West Africa Squadron , which discovered various ships had contained evidence of the illegal trade. In 1613, during the rule of Tokugawa Hidetada of the Tokugawa shogunate , the British ship Clove , under the command of Captain John Saris , was the first English ship to call on Japan. Saris was the chief factor of the EIC's trading post in Java, and with

2825-640: The December 2001 acquisition of Lernout & Hauspie assets, the company moved into the speech recognition business and began to compete with Nuance. Lernout & Hauspie had acquired speech recognition company Dragon Systems in June 2001, shortly before becoming bankrupt in October. Scansoft acquired speech recognition company SpeechWorks in 2003. In 2013, Nuance confirmed that its natural language processing algorithms supported Apple 's Siri voice assistant. In 2019, Nuance spun off its automotive division as

2938-477: The Dutch. This compelled the company to formally abandon their efforts in the Spice Islands, and turn their attention to Bengal where, by this time, they were making steady, if less exciting, profits. After gaining the indifferent patronage of the Mughal Empire , whose cities were 'the megacities of their time' and whose wealth was unrivaled outside of Asia in the 17th Century, the Company's first century in

3051-539: The EIC surrendered in 1690, and the company sent envoys to Aurangzeb 's camp to plead for a pardon. The company's envoys had to prostrate themselves before the emperor, pay a large indemnity, and promise better behaviour in the future. The emperor withdrew his troops, and the company subsequently re-established itself in Bombay and set up a new base in Calcutta. The East India Company's archives suggest its involvement in

3164-556: The East Indies . For a period of fifteen years, the charter awarded the company a monopoly on English trade with all countries east of the Cape of Good Hope and west of the Straits of Magellan . Any traders there without a licence from the company were liable to forfeiture of their ships and cargo (half of which would go to the Crown and half to the company), as well as imprisonment at the "royal pleasure." The charter named Thomas Smythe as

3277-496: The English language. Senior officials, although mostly still Swedish, all learned English and all major internal documents were in English, the lingua franca of multinational corporations. After the war, the number of businesses having at least one foreign country operation rose drastically from a few thousand to 78,411 in 2007. Meanwhile, 74% of parent companies are located in economically advanced countries. Developing and former communist countries such as China, India, and Brazil are

3390-663: The European colonial charter companies were disbanded, with the final colonial corporation, the Mozambique Company , dissolving in 1972. Mining of gold, silver, copper, and oil was a major activity early on and remains so today. International mining companies became prominent in Britain in the 19th century, such as the Rio Tinto company founded in 1873, which started with the purchase of sulfur and copper mines from

3503-587: The Indian Ocean. The company achieved a major victory over the Portuguese in the Battle of Swally in 1612, at Suvali in Surat . The company decided to explore the feasibility of a foothold in mainland India, with official sanction from both Britain and the Mughal Empire , and requested that the Crown launch a diplomatic mission. Company ships docked at Surat in Gujarat in 1608. The company's first Indian factory

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3616-530: The Indian subcontinent and Hong Kong . At its peak, the company was the largest corporation in the world by various measures and had its own armed forces in the form of the company's three presidency armies , totalling about 260,000 soldiers, twice the size of the British Army at certain times. Originally chartered as the "Governor and Company of Merchants of London Trading into the East-Indies,"

3729-575: The International Energy Agency (IEA), enabling states to coordinate policy, gather data, and monitor global oil reserves. In the 1970s, OPEC gradually nationalized the Seven Sisters. The Kingdom of Saudi Arabia, as the only largest world oil producer, could leverage this. However, Saudi Arabia opted for the correct approach and maintained consistent oil prices throughout the 1970s. In 1979, the "second oil shock" came from

3842-488: The Mughal emperor Shah Jahan extended his hospitality to the English traders to the richest region of the Mutual Empire Bengal , and in 1717 customs duties were completely waived for the English in Bengal. The company's mainstay businesses were by then cotton, silk, opium, indigo dye , saltpetre , and tea. The Dutch were aggressive competitors and had meanwhile expanded their monopoly of the spice trade in

3955-863: The Mughal-ruled areas was spent cultivating their relationship with the Mughal Dynasty, and conducting peaceful trade at great profit. At first it should be said the EIC was drawn into the Mughal system, acting as a kind of vassal to Mughal authority in present-day Bangladesh: from this position that the EIC would ultimately outplay and outmaneuver everyone else in the region, to eventually use that same system to hold power. What started as trading posts on undesirable land were developed into sprawling factory complexes with hundreds of workers sending exotic goods to England and managing protected points to export English finished goods to local merchants. The Company's initial rise in Bengal and successes generally came at

4068-574: The Netherlands has become a popular choice, as its company laws have fewer requirements for meetings, compensation, and audit committees, and Great Britain had advantages due to laws on withholding dividends and a double-taxation treaty with the United States. Corporations can legally engage in tax avoidance through their choice of jurisdiction but must be careful to avoid illegal tax evasion . Corporations that are broadly active across

4181-558: The OLI framework. The other theoretical dimension of the role of multinational corporations concerns the relationship between the globalization of economic engagement and the culture of national and local responses. This has a history of self-conscious cultural management going back at least to the 60s. For example: Ernest Dichter, architect, of Exxon's international campaign, writing in the Harvard Business Review in 1963,

4294-531: The Spanish government. Rio Tinto, now based in London and Melbourne , Australia, has made many acquisitions and expanded globally to mine aluminum , iron ore , copper , uranium , and diamonds . European mines in South Africa began opening in the late 19th century, producing gold and other minerals for the world market, jobs for locals, and business and profits for companies. Cecil Rhodes (1853–1902)

4407-464: The Third World colonies. That changed dramatically after 1945 as investors turned to industrialized countries and invested in manufacturing (especially high-tech electronics, chemicals, drugs, and vehicles) as well as trade. Sweden's leading manufacturing concern was SKF , a leading maker of bearings for machinery. In order to expand its international business, it decided in 1966 it needed to use

4520-636: The U.S. applies its corporate taxation "extraterritorially", which has motivated tax inversions to change the home state. By 2019, most OECD nations, with the notable exception of the U.S., had moved to territorial tax in which only revenue inside the border was taxed; however, these nations typically scrutinize foreign income with controlled foreign corporation (CFC) rules to avoid base erosion and profit shifting . In practice, even under an extraterritorial system, taxes may be deferred until remittance, with possible repatriation tax holidays , and subject to foreign tax credits . Countries generally cannot tax

4633-541: The United States sanctions against Iran ; European companies faced with the possibility of losing access to the U.S. market by trading with Iran. International investment agreements also facilitate direct investment between two countries, such as the North American Free Trade Agreement and most favored nation status. Raymond Vernon reported in 1977 that of the largest multinationals focused on manufacturing, 250 were headquartered in

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4746-506: The United States scrutinizes foreign investments. In addition, corporations may be prohibited from various business transactions by international sanctions or domestic laws. For example, Chinese domestic corporations or citizens have limitations on their ability to make foreign investments outside China, in part to reduce capital outflow . Countries can impose extraterritorial sanctions on foreign corporations even for doing business with other foreign corporations, which occurred in 2019 with

4859-614: The United States as the largest consumer and guarantor of the existing oil security order. Since the Iraq War, OPEC has had only a minor influence on oil prices, but it has expanded to 11 members, accounting for about 40 percent of total global oil production, although this is a decline from nearly 50 percent in 1974. Oil has practically become a common commodity, leading to much more volatile prices. Most OPEC members are wealthy, and most remain dependent on oil revenues, which has serious consequences, such as when OPEC members were pressured by

4972-461: The United States from 2010. The USA became the leading oil producer, creating tension with OPEC. In 2014, Saudi Arabia increased production to push new American producers out of the market, leading to lower prices. OPEC then reduced production in 2016 to raise prices, further worsening relations with the United States. By 2012, only 7% of the world's known oil reserves were in countries that allowed private international companies free rein; 65% were in

5085-477: The United States on the global oil market. In 1959, companies lowered the price of oil due to a surplus in the market. This reduction dealt a significant blow to the finances of producers. Saudi oil minister Abdullah Tariki and Venezuela’s Juan Perez Alfonso entered into a secret agreement (the Mahdi Pact), promising that if the price of oil was lowered a second time, they would take collective action against

5198-696: The United States turned to foreign oil sources, which had a significant impact on the recovery of the West after World War II. Most of the world's oil was found in Latin America and the Middle East, particularly in the Arab states of the Persian Gulf. This increase in non-American production was enabled by multinational corporations known as the 'Seven Sisters'. The "Seven Sisters" was a common term for

5311-629: The United States, 115 in Western Europe, 70 in Japan, and 20 in the rest of the world. The multinationals in banking numbered 20 headquartered in the United States, 13 in Europe, nine in Japan and three in Canada. Today multinationals can select from a variety of jurisdictions for various subsidiaries, but the ultimate parent company can select a single legal domicile ; The Economist suggests that

5424-401: The West to the post-colonial South and invest either in foreign expenditures or ostentatious economic development projects. After 1974, most of the money from OPEC members ceased as payments for goods and services or investments in Western industry. In February 1974, the first Washington Energy Conference was convened. The most significant contribution of this conference was the establishment of

5537-812: The assistance of William Adams , an English sailor who had arrived in Japan in 1600, he was able to gain permission from the ruler to establish a commercial house in Hirado on the Japanese island of Kyushu : We give free license to the subjects of the King of Great Britaine, Sir Thomas Smythe, Governor and Company of the East Indian Merchants and Adventurers forever safely come into any of our ports of our Empire of Japan with their shippes and merchandise, without any hindrance to them or their goods, and to abide, buy, sell and barter according to their own manner with all nations, to tarry here as long as they think good, and to depart at their pleasure. Unable to obtain Japanese raw silk for export to China, and with their trading area reduced to Hirado and Nagasaki from 1616 onwards,

5650-408: The behavior of multinational corporations, given that they are effectively "stateless" actors, is one of several urgent global socioeconomic problems that has emerged during the late twentieth century. Potentially, the best concept for analyzing society's governance limitations over modern corporations is the concept of "stateless corporations". Coined at least as early as 1991 in Business Week ,

5763-409: The chaos widened and the stakes were raised. Ultimately, the company won out, generally through as much diplomacy and state-craft(fraud and deception). The gradual rise of the EIC within the Mughal network culminated in the Second Anglo-Maratha War , in which the Company successfully ousted the Empire's official protectors in the Maratha, the Maratha high water point in their rise to power, and installed

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5876-452: The coast of China that helped secure EIC ports in China, independently attacking the Portuguese in the Persian Gulf Residencies primarily for political reasons. The company established trading posts in Surat (1619) and Madras (1639). By 1647, the company had 23 factories and settlements in India, and 90 employees. Many of the major factories became some of the most populated and commercially influential cities in Bengal, including

5989-579: The collapse of the Shah's regime in Iran. Iran became a regional power due to oil money and American weapons. The Shah eventually abdicated and fled the country. This prompted a strike by thousands of Iranian oil workers, significantly reducing oil production in Iran. Saudi Arabia tried to cope with the crisis by increasing production, but oil prices still soared, leading to the "second oil shock." Saudi Arabia significantly reduced oil production, losing most of its revenues. In 1986, Riyadh changed course, and oil production in Saudi Arabia sharply increased, flooding

6102-604: The companies. This occurred in 1960. Prior to the 1973 oil crisis , the Seven Sisters controlled around 85 percent of the world's petroleum reserves . In the 1970s, most countries with large reserves nationalized their reserves that had been owned by major oil companies. Since then, industry dominance has shifted to the OPEC cartel and state-owned oil and gas companies, such as Saudi Aramco , Gazprom (Russia), China National Petroleum Corporation , National Iranian Oil Company , PDVSA (Venezuela), Petrobras (Brazil), and Petronas (Malaysia). A unilateral increase in oil prices

6215-457: The company Cerence, allowing it to focus on health care applications. On April 12, 2021, Microsoft announced that it will buy Nuance Communications for $ 19.7 billion, or $ 56 a share, a 22% increase over the previous closing price. Nuance's CEO, Mark Benjamin, stayed with the company. This was Microsoft's second-biggest acquisition up to that point, after its purchase of LinkedIn for $ 24 billion (~$ 29.9 billion in 2023) in 2016. Shortly after

6328-428: The company closed its factory in 1623. The first of the Anglo-Indian wars occurred in 1686 when the company conducted naval operations against Shaista Khan , the governor of Mughal Bengal . This led to the siege of Bombay and the subsequent intervention of the Mughal Emperor, Aurangzeb . Subsequently, the English company was defeated and fined. In September 1695, Captain Henry Every , an English pirate on board

6441-522: The company enjoyed allowed them to return to Britain and establish sprawling estates and businesses, and to obtain political power, such as seats in the House of Commons. Ship captains sold their appointments to successors for up to £500. As recruits aimed to return to Britain wealthy by securing Indian money, their loyalties to their homeland increased. The company developed a lobby in the English parliament. Pressure from ambitious tradesmen and former company associates (pejoratively termed Interlopers by

6554-500: The company rose to account for half of the world's trade during the mid-1700s and early 1800s, particularly in basic commodities including cotton , silk , indigo dye , sugar , salt , spices , saltpetre , tea , and later, opium . The company also initiated the beginnings of the British Raj in the Indian subcontinent . The company eventually came to rule large areas of the Indian subcontinent, exercising military power and assuming administrative functions. Company-ruled areas in

6667-505: The company's factories in India and imprison their officers, who were almost lynched by a mob of angry Mughals , blaming them for their countryman's depredations, and threatened to put an end to all English trading in India. To appease Emperor Aurangzeb and particularly his Grand Vizier Asad Khan , Parliament exempted Every from all of the Acts of Grace (pardons) and amnesties it would subsequently issue to other pirates. The East India Company started selling opium to Chinese merchants in

6780-443: The company), who wanted to establish private trading firms in India, led to the passing of the deregulating act in 1694. This act allowed any English firm to trade with India, unless specifically prohibited by act of parliament, thereby annulling the charter that had been in force for almost 100 years. When the East India Company Act 1697 ( 9 Will. 3 . c. 44) was passed in 1697, a new "parallel" East India Company (officially titled

6893-510: The conception was theoretically clarified in 1993: that an empirical strategy for defining a stateless corporation is with analytical tools at the intersection between demographic analysis and transportation research. This intersection is known as logistics management , and it describes the importance of rapidly increasing global mobility of resources. In a long history of analysis of multinational corporations, we are some quarter-century into an era of stateless corporations—corporations that meet

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7006-400: The continent as they individually contended with others, steadily amassing more land and power in India to themselves. In the 18th Century, the primary source of the Company's profits in Bengal became taxation in conquered and controlled provinces, as the factories became fortresses and administrative hubs for networks of tax collectors that expanded into enormous cities. The Mughal Empire was

7119-643: The creation of a "world customer". The idea of a global corporate village entailed the management and reconstitution of parochial attachments to one's nation. It involved not a denial of the naturalness of national attachments, but an internationalization of the way a nation defines itself. "Multinational enterprise" (MNE) is the term used by international economist and similarly defined with the multinational corporation (MNC) as an enterprise that controls and manages production establishments, known as plants located in at least two countries. The multinational enterprise (MNE) will engage in foreign direct investment (FDI) as

7232-597: The deal, the Competition and Markets Authority , a UK regulatory body, stated it was looking into the deal on the basis of antitrust concerns. In December 2021, it was reported that the deal would be approved by the European Union . The acquisition was completed on March 4, 2022. In May 2023, Nuance announced an unspecified number of layoffs . Multinational corporation Most of the current largest and most influential companies are publicly traded multinational corporations, including Forbes Global 2000 companies. The history of multinational corporations began with

7345-460: The debate from a neo-liberal perspective in Storm over the Multinationals (1977). British East India Company The East India Company ( EIC ) (1600–1874) was an English, and later British, joint-stock company founded in 1600 and dissolved in 1874. It was formed to trade in the Indian Ocean region , initially with the East Indies (South Asia and Southeast Asia), and later with East Asia. The company gained control of large parts of

7458-411: The document management software PaperPort . Visioneer eventually sold its hardware division to Primax Electronics, Ltd. in January 1999. Two months later, in March, Visioneer acquired ScanSoft from Xerox to form a new public company with ScanSoft as the new company-wide name. Prior to 2001, ScanSoft focused primarily on desktop imaging software such as TextBridge, PaperPort and OmniPage . Beginning with

7571-425: The expense of competing European powers through the art of currying favors and well-placed bribes, as the company was matched at every step with French expansion in the region (whose equivalent company carried substantial royal support). See French East India Company . Throughout the entire century the company only resorted to force against the Mughals once, with terrible consequences. The Anglo-Mughal war (1686–1690)

7684-481: The firm makes direct investments in host country plants for equity ownership and managerial control to avoid some transaction costs . Sanjaya Lall in 1974 proposed a spectrum of scholarly analysis of multinational corporations, from the political right to the left. He put the business school how-to-do-it writers at the extreme right, followed by the liberal laissez-faire economists, and the neoliberals (they remain right of center but do allow for occasional mistakes of

7797-466: The first East India Company voyage in 1601 aboard Red Dragon . The following year, whilst sailing in the Malacca Straits , Lancaster took the rich 1,200 ton Portuguese carrack Sao Thome carrying pepper and spices. The booty enabled the voyagers to set up two " factories " (trading posts) – one at Bantam on Java and another in the Moluccas (Spice Islands) before leaving. On return to England in 1603, they learned of Elizabeth's death, but Lancaster

7910-432: The first English expedition to reach India that way. Having sailed around Cape Comorin to the Malay Peninsula , they preyed on Spanish and Portuguese ships there before returning to England in 1594. The biggest prize that galvanised English trade was the seizure of a large Portuguese carrack , the Madre de Deus , by Walter Raleigh and the Earl of Cumberland at the Battle of Flores on 13 August 1592. When she

8023-470: The first governor of the company, and 24 directors (including James Lancaster) or "committees", who made up a Court of Directors. They, in turn, reported to a Court of Proprietors, who appointed them. Ten committees reported to the Court of Directors. By tradition, business was initially transacted at the Nags Head Inn, opposite St Botolph's church in Bishopsgate , before moving to East India House in Leadenhall Street . Sir James Lancaster commanded

8136-436: The first omni-font optical character-recognition system – a computer program capable of recognizing text written in any normal font. In 1980, Kurzweil sold his company to Xerox. The company became known as Xerox Imaging Systems (XIS), and later ScanSoft. In March 1992, a new company called Visioneer, Inc. was founded to develop scanner hardware and software products, such as a sheetfed scanner called PaperMax and

8249-561: The group stated their intention "to venture in the pretended voyage to the East Indies (the which it may please the Lord to prosper)" and to themselves invest £30,133 (over £4,000,000 in today's money). Two days later, the "Adventurers" reconvened and resolved to apply to the Queen for support of the project. Although their first attempt had not been completely successful, they sought the Queen's unofficial approval to continue. They bought ships for

8362-416: The hands of state-owned companies that operated in one country and sold oil to multinationals such as BP, Shell, ExxonMobil and Chevron. Down through the 1930s, about 80% of the international investments by multinational corporations were concentrated in the primary sector, especially mining (especially oil) and agriculture (rubber, tobacco, sugar, palm oil , coffee, cocoa, and tropical fruits). Most went to

8475-651: The imperial patronage, soon expanded its commercial trading operations. It eclipsed the Portuguese Estado da Índia , which had established bases in Goa , Chittagong , and Bombay ; Portugal later ceded Bombay to England as part of the dowry of Catherine of Braganza on her marriage to King Charles II . The East India Company also launched a joint attack with the Dutch United East India Company (VOC) on Portuguese and Spanish ships off

8588-415: The internationalization of production. For the first time in history, production, marketing, and investment are being organized on a global scale rather than in terms of isolated national economies. International business is also a specialist field of academic research. Economic theories of the multinational corporation include internalization theory and the eclectic paradigm . The latter is also known as

8701-460: The largest recipients. However, 70% of foreign direct investment went into developed countries in the form of stocks and cash flows. The rise in the number of multinational companies could be due to a stable political environment that encourages cooperation, advances in technology that enable management of faraway regions, and favorable organizational development that encourages business expansion into other countries. A multinational corporation (MNC)

8814-474: The laws and regulations of both their domicile and the additional jurisdictions where they are engaged in business. In some cases, the jurisdiction can help to avoid burdensome laws, but regulatory statutes often target the "enterprise" with statutory language around "control". As of 1992 , the United States and most OECD countries have the donot legal authority to tax a domiciled parent corporation on its worldwide revenue, including subsidiaries. As of 2019 ,

8927-434: The market with cheap oil. This caused a worldwide drop in oil prices, hence the "third oil shock" or "counter-shock." However, this shock represented something much bigger—the end of OPEC's dominance and its control over oil prices. Iraqi President Saddam Hussein decided to attack Kuwait. The invasion sparked a crisis in the Middle East, prompting Saudi Arabia to request assistance from the United States. The United States sent

9040-480: The marketplace such as externalities). Moving to the left side of the line are nationalists, who prioritize national interests over corporate profits, then the "dependencia" school in Latin America that focuses on the evils of imperialism, and on the far left the Marxists. The range is so broad that scholarly consensus is hard to discern. Anti-corporate advocates criticize multinational corporations for being without

9153-402: The original company faced scarcely any measurable competition. The companies merged in 1708, by a tripartite indenture involving both companies and the state, with the charter and agreement for the new United Company of Merchants of England Trading to the East Indies being awarded by Sidney Godolphin, 1st Earl of Godolphin . Under this arrangement, the merged company lent a sum of £3,200,000 to

9266-556: The pirates hostis humani generis ("the enemy of humanity"). In mid-1696 the government issued a £500 bounty on Every's head and offered a free pardon to any informer who disclosed his whereabouts. The first worldwide manhunt in recorded history was underway. The plunder of Aurangzeb's treasure ship had serious consequences for the English East India Company. The furious Mughal Emperor Aurangzeb ordered Sidi Yaqub and Nawab Daud Khan to attack and close four of

9379-409: The power of the EIC, King Charles II granted the EIC (in a series of five acts around 1670) the rights to autonomous territorial acquisitions, to mint money, to command fortresses and troops and form alliances, to make war and peace, and to exercise both civil and criminal jurisdiction over the acquired areas. In 1689, a Mughal fleet commanded by Sidi Yaqub attacked Bombay. After a year of resistance

9492-498: The pre-1707 Mughal fiefs and holdings, with their capital Delhi routinely under the control of Maratha, Afghan, or usurper generals' armies. The EIC was able to take advantage of this chaos, slowly assuming direct control of the province of Bengal , and fighting numerous wars against the French for control of the east coast. The Company's position in the Mughal court as it fell apart made it possible to sponsor various powerful people on

9605-560: The price collapse in 1998–1999. The United States still maintains close relations with Saudi Arabia. In 2003, U.S. forces invaded Iraq with the aim of removing the dictatorship and gaining access to Iraqi oil reserves, giving the United States greater strategic importance from 2000 to 2008. During this period, there was a constant shortage of oil, but its consumption continued to rise, maintaining high prices and leading to concerns about "peak oil". From 2005 to 2012, there were advances in oil and gas extraction, leading to increased production in

9718-542: The realities of the needs of source materials on a worldwide basis and to produce and customize products for individual countries. One of the first multinational business organizations, the East India Company , was established in 1601. After the East India Company came the Dutch East India Company , founded on March 20, 1603, which would become the largest company in the world for nearly 200 years. The main characteristics of multinational companies are: When

9831-746: The region gradually expanded after the Battle of Plassey in 1757 and by 1858 most of modern India, Pakistan and Bangladesh was either ruled by the company or princely states closely tied to it by treaty. Following the Sepoy Rebellion of 1857 , the Government of India Act 1858 led to the British Crown assuming direct control of present-day Bangladesh, Pakistan and India in the form of the new British Indian Empire . The company subsequently experienced recurring problems with its finances, despite frequent government intervention. The company

9944-511: The region's battlefields for a thousand years, with cannon so well integrated that the Mughals fought with cannon mounted on elephants; all were no match to line infantry with decent discipline supported with field cannon. Repeatedly, a few thousand company sepoys fought vastly larger Mughal forces numerically and came out victorious. Afghan, Mughal, and Maratha factions started creating their own European-style forces, often with French equipment, as

10057-459: The richest in the world in 1700, and the East India Company tried to strip it bare for a century thereafter. Dalrymple calls it "the single largest transfer of wealth until the Nazis." What was in the 17th century the production capital of the world for textiles was forced to become a market for British-made textiles. Statues, jewels, and various other valuables were moved from the palaces of Bengal to

10170-462: The seven multinational companies that dominated the global petroleum industry from the mid-1940s to the mid-1970s. The nationalization of the Iranian oil industry in 1951 by Iranian Prime Minister Mohammad Mosaddegh and the subsequent boycott of Iranian oil by all companies had dramatic consequences for Iran and the international oil market. Iran was unable to sell any of its oil. In August 1953,

10283-648: The slave trade began in 1684, when a Captain Robert Knox was ordered to buy and transport 250 slaves from Madagascar to St. Helena . The East India Company began using and transporting slaves in Asia and the Atlantic in the early 1620s, according to the Encyclopædia Britannica, or in 1621, according to Richard Allen. Eventually, the company ended the trade in 1834 after numerous legal threats from

10396-408: The straits en route to Surat . The pirates gave chase and caught up with the Fateh Muhammed some days later, and meeting little resistance, took some £40,000 of silver. Every continued in pursuit and managed to overhaul Ganj-i-Sawai , which resisted strongly before eventually striking . Ganj-i-Sawai carried enormous wealth and, according to contemporary East India Company sources, was carrying

10509-455: The then-prime minister was overthrown by a pro-American dictatorship led by the Shah, and in October 1954, the Iranian industry was denationalized. Worldwide oil consumption increased rapidly between 1949 and 1970, a period known as the 'golden age of oil'. This increase in consumption was caused not only by the growth of production by multinational oil companies but also by the strong influence of

10622-536: The townhouses of the English countryside. Bengal in particular suffered the worst of Company tax farming, highlighted by the Great Bengal famine of 1770 . The primary tool of expansion for the company was the Sepoy. The Sepoys were locally raised, mostly Muslim, soldiers with European training and equipment, who changed warfare in present-day South Asia. Mounted forces and their superior mobility had been king on

10735-540: The upper hand by establishing a stronghold in the spice islands (now Indonesia), enforcing a near-monopoly through aggressive policies that eventually drove the EIC to seek trade opportunities in India instead. The English company opened a factory (trading post) in Bantam on Java on its first voyage, and imports of pepper from Java remained an important part of the company's trade for twenty years. English traders frequently fought their Dutch and Portuguese counterparts in

10848-563: The venture and increased their investment to £68,373. They convened again a year later, on 31 December 1600, and this time they succeeded; the Queen responded favourably to a petition by George, Earl of Cumberland and 218 others, including James Lancaster, Sir John Harte , Sir John Spencer (both of whom had been Lord Mayor of London ), the adventurer Edward Michelborne , the nobleman William Cavendish and other aldermen and citizens. She granted her charter to their corporation named Governor and Company of Merchants of London trading into

10961-575: The walled forts of Fort William in Bengal, Fort St George in Madras, and Bombay Castle . The first century of the Company, despite its original profits coming primarily from piracy in the Spice Islands between competing European powers and their companies, saw the East India Company change focus after suffering a major setback in 1623 when their factory in Amboyna in the Moluccas was attacked by

11074-573: The world without a concentration in one area have been called stateless or "transnational" (although "transnational corporation" is also used synonymously with "multinational corporation" ), but as of 1992, a corporation must be legally domiciled in a particular country and engage in other countries through foreign direct investment and the creation of foreign subsidiaries. Geographic diversification can be measured across various domains, including ownership and control, workforce, sales, and regulation and taxation. Multinational corporations may be subject to

11187-503: The worldwide revenue of a foreign subsidiary, and taxation is complicated by transfer pricing arrangements with parent corporations. For small corporations, registering a foreign subsidiary can be expensive and complex, involving fees, signatures, and forms; a professional employer organization (PEO) is sometimes advertised as a cheaper and simpler alternative, but not all jurisdictions have laws accepting these types of arrangements. Disputes between corporations in different nations

11300-510: Was a complete defeat, ending when the EIC effectively swore fealty to the Mughals to get their factories back. The East India Company's fortunes changed for the better in 1707 when Bengal and other regions under Mughal rule fell into anarchy after the death of the Mughal Emperor Aurangzeb . A series of large-scale rebellions, and the collapse of the Mughal taxation system led to the effective independence of virtually all of

11413-411: Was brought in to Dartmouth she was the largest vessel ever seen in England and she carried chests of jewels, pearls, gold, silver coins, ambergris , cloth, tapestries, pepper, cloves, cinnamon, nutmeg, benjamin (a highly aromatic balsamic resin used for perfumes and medicines), red dye, cochineal and ebony. Equally valuable was the ship's rutter (mariner's handbook) containing vital information on

11526-764: Was dissolved in 1874 under the terms of the East India Stock Dividend Redemption Act enacted one year earlier, as the Government of India Act had by then rendered it vestigial, powerless, and obsolete. The official government machinery of the British Empire had assumed its governmental functions and absorbed its armies. In 1577, Francis Drake set out on an expedition from England to plunder Spanish settlements in South America in search of gold and silver. Sailing in

11639-541: Was established in 1611 at Masulipatnam on the Andhra Coast of the Bay of Bengal , and its second in 1615 at Surat. The high profits reported by the company after landing in India initially prompted James I to grant subsidiary licences to other trading companies in England. However, in 1609, he renewed the East India Company's charter for an indefinite period, with the proviso that its privileges would be annulled if trade

11752-448: Was fully aware that the means to overcoming cultural resistance depended on an "understanding" of the countries in which a corporation operated. He observed that companies with "foresight to capitalize on international opportunities" must recognize that " cultural anthropology will be an important tool for competitive marketing". However, the projected outcome of this was not the assimilation of international firms into national cultures, but

11865-1113: Was highly successful, and Jahangir sent a letter to James through Sir Thomas Roe: Upon which assurance of your royal love I have given my general command to all the kingdoms and ports of my dominions to receive all the merchants of the English nation as the subjects of my friend; that in what place soever they choose to live, they may have free liberty without any restraint; and at what port soever they shall arrive, that neither Portugal nor any other shall dare to molest their quiet; and in what city soever they shall have residence, I have commanded all my governors and captains to give them freedom answerable to their own desires; to sell, buy, and to transport into their country at their pleasure. For confirmation of our love and friendship, I desire your Majesty to command your merchants to bring in their ships of all sorts of rarities and rich goods fit for my palace; and that you be pleased to send me your royal letters by every opportunity, that I may rejoice in your health and prosperous affairs; that our friendship may be interchanged and eternal. The company, which benefited from

11978-569: Was incorporated in 1992 as Visioneer. In 1999, Visioneer acquired ScanSoft, Inc. (SSFT), and the combined company became known as ScanSoft. In September 2005, ScanSoft Inc. acquired and merged with Nuance Communications, a natural language spinoff from SRI International . The resulting company adopted the Nuance name. During the prior decade, the two companies competed in the commercial large-scale speech application business. In 1974, Raymond Kurzweil founded Kurzweil Computer Products, Inc. to develop

12091-769: Was knighted by the new king, James I , on account of the voyage's success. By this time, the war with Spain had ended but the company had profitably breached the Spanish-Portuguese duopoly; new horizons opened for the English. In March 1604, Sir Henry Middleton commanded the company's second voyage . General William Keeling , a captain during the second voyage, led the third voyage aboard Red Dragon from 1607 to 1610 along with Hector under Captain William Hawkins and Consent under Captain David Middleton . Early in 1608, Alexander Sharpeigh

12204-546: Was labeled as "the largest nonviolent transfer of wealth in human history." The OPEC sought immediate discussions regarding participation in national oil industries. Companies were not inclined to object as the price hike benefited both them and OPEC members. In 1980, the Seven Sisters were entirely displaced and replaced by national oil companies (NOCs). The rise in oil prices burdened developing countries with balance of payments deficits, leading to an energy crisis. OPEC members had to abandon their plan of redistributing wealth from

12317-577: Was made captain of the company's Ascension , and general or commander of the fourth voyage. Thereafter two ships, Ascension and Union (captained by Richard Rowles), sailed from Woolwich on 14 March 1608. This expedition was lost. Initially, the company struggled in the spice trade because of competition from the well-established Dutch East India Company . This rivalry led to military skirmishes, with each company establishing fortified trading posts, fleets, and alliances with local rulers. The Dutch, better financed and supported by their government, gained

12430-501: Was one of the few businessmen in the era who became Prime Minister (of South Africa 1890–1896). His mining enterprises included the British South Africa Company and De Beers . The latter company practically controlled the global diamond market from its base in southern Africa. In 1945, the United States was the world's largest oil producer. However, their reserves were declining due to high demand. Therefore,

12543-603: Was showcased by the Anglo-Nepalese war (1814–1816). The Draft History of the Qing records the Chinese Qing dynasty as formally commencing trade with the British in 1698. Within the first two decades of the 17th century, the Dutch East India Company or Vereenigde Oostindische Compagnie , (VOC) was the wealthiest commercial operation in the world with 50,000 employees worldwide and

12656-527: Was so high between the Dutch and the British East Indies Trading Companies that it escalated into at least four Anglo-Dutch wars: 1652–1654, 1665–1667, 1672–1674 and 1780–1784. Competition arose in 1635 when Charles I granted a trading licence to Sir William Courteen , which permitted the rival Courteen association to trade with the east at any location in which the EIC had no presence. In an act aimed at strengthening

12769-632: Was unprofitable for three consecutive years. In 1615, James I instructed Sir Thomas Roe to visit the Mughal Emperor Nur-ud-din Salim Jahangir (r. 1605–1627) to arrange for a commercial treaty that would give the company exclusive rights to reside and establish factories in Surat and other areas. In return, the company offered to provide the Emperor with goods and rarities from the European market. This mission

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