Managing in a global context
While the majority of MNCs today is from developed countries, in the past decade there has been an increase in number of MNCs from developing countries. According to a study by Ernst&Young (May 2008), these are claiming growing share of the global market, manufacturing and consuming themselves high-technology products and establishing their production bases abroad, most often in other developing countries. This phenomenon is called “Globalization 2.0” and refers to the trend of having developing countries-MNCs performing at levels comparable to those of their industrialized nations' competitors. Among the global Top20 on the stock market, 8 companies are from emerging countries. Nevertheless, there is a sharp distinction between the BRIC countries (Brazil, Russian Federation, India and China) and other developing countries: the first ones represent 53% in number among the world’s top 1000 companies.
For a country to be classified by the UN as a “developing country”, it must meet three criteria: a low-income criterion, a human resource weakness criterion and an economic vulnerability criterion. Among developing countries there are now considerable differences between the catching-up countries (e.g. newly industrialized countries) and falling behind, less developed countries.
Developing countries-MNCs tend to be less competitive than developed countries-MNCs because of underdeveloped institutions and problematic environments. They have smaller size, less cutting-edge technology and less sophisticated resources. But empirical analysis shows that when both types of MNCs operate in countries with difficult governance