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2015-12_dc

2 D+C  e-Paper  December 2015 Title: Steel worker at Tata mill in Jamshedpur. Photo: Lineair Focus: Multinationals from emerging markets Cheap cement Cemex is one of Mexico’s largest corporations and is considered the world’s third most important cement producer. Cemex managers are not only very effective, but also take interest in social issues, for instance by supplying poor communities with building materials. Virginia Mercado, a Mexican social scientist, reports.  Page 16 Corporate social responsibility The Tata group is among India’s most impressive enterprises. It has a long history of excellence. It introduced the eight-hours working day and free medical care for staff in the early 20th century. As journalist Aditi Roy Ghatak writes, the ambition today is to become one of the world’s 25 most important corpora- tions.  Page 19 China’s underestimated giants Several Chinese companies have become corporate forces of global relevance in recent years. Nonetheless, consumers in rich nations tend not to be aware of them. Doris Fischer, a China scholar at Universität Würzburg assesses matters in an interview.  Page 22 Entrepreneurial genius Bill Heinecke started Minor International in 1978, running only a small hotel at first. He has since become a citizen of the country and is now running a business empire of 150 hotels and 1700 restaurants in Asia, Africa, Australia and Europe. Journalist Cod Satrusayang and business consultant Chayut Setboonsarng sum up Heinecke’s story.  Page 26 Manila’s Pils conquers the world Most Europeans think San Miguel is a Spanish beer. It is not. San Miguel is a Filipino company with headquarters in Manila. It has diversified into many industries that are unrelated to beverages. Manila-based journalist Alan Robles outlines San Miguel’s history.  Page 28 Growing ambitions Africa is still an underestimated continent, and that is true of its private-sector companies as well. Some of them, however, are increasingly thinking in continental dimensions and operating across borders. Their international relevance will keep growing, as Josef Boven of DEG, the KfW subsidiary that finances private-sector investments in developing countries and emerging markets, told D+C/E+Z in an inter- view.  Page 30 Editorial Forces to be reckoned with Multinational corporations are business giants that have an impact far beyond their home nation’s borders. It is a fantasy, however, that they would not care about borders anymore. Even in the financial industry, one of the world’s most globalised, it matters very much which government steps in when a huge bank gets into trouble. That was evident in the global financial crisis. In past decades, it was pretty much self-evident that multinationals came from rich nations. It was assumed that competitors from developing coun- tries would not catch up. The challenges looked too daunting. That was then. Corporate powerhouses from emerging economies increas- ingly have impacts on the global economy, proving that liberalisation, espe- cially in the context of the World Trade Organization (WTO), has made a dif- ference. Clever business leaders in Asia, Latin America and Africa are eager to grasp opportunities – and know how to do so. There are different kinds of emerging-market multinationals. Some have been around for decades. Others are quite young. Many, though not all, have built a culture of corpo- rate excellence, not only in terms of profits, but also customer service and labour relations. All are adept at bridging cultural divides. Political context still matters however. Though not steered by their govern- ments, emerging-market multinationals benefit from state support in several ways. The older grew big in the era when governments of developing coun- tries shielded their markets from international competition. Many compa- nies became lazy and stopped innovating. But those that strived for excel- lence were able to expand fast when liberalisation set in. It is no coincidence that most emerging-market multinationals are based in comparatively big markets. Thriving at home is a precondition for succeed- ing abroad. If governments act prudently, regional trade organisations can improve matters for enterprises in small economies. Other ways of state sup- port matter as well, such as cheap credit granted by public-sector banks or the provision of relevant public infrastructure. A corporation will find com- petent staff if state universities educate students in the right subjects. Gov- ernment agencies can supply valuable information and advice, and ambas- sadors to foreign countries can speak up for private-sector companies. All summed up, emerging markets are supporting corporations that do business abroad in the same ways as established economic powers do. Some people point out that corporate newcomers from foreign countries must be benefitting from corruption and loose interpretation of laws. The truth is that, while shady deals may sometimes help, a company must get a lot of things right to succeed in global competition. Oh, and established multinational giants sometimes cheat too, as the recent case of Volkswagen and numerous banking scandals proved. The rise of emerging-market multinationals matters even though they are similar to their longer-established competitors from rich nations. Big corpo- rations set standards, have an impact on policy-making at the national level and contribute to shaping globalisation. It now looks as if emerging markets are heading for recession. Crisis should prove painful, but will not block the rise of some big corporations. They are forces to be reckoned with long term. Hans Dembowski is editor in chief of D+C ­Development and ­Cooperation / E+Z Entwicklung und Zusammen­arbeit. [email protected]

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