American Business History - the Mid 50s

In the midst '50s the economic progress has arrived at a point where it stopped and the global political situation made the biggest U.S. corporations turn their attention in investing outside America's borders. Medical aids that U.S. offered the world has helped into making possible these investments.

At that time America's largest companies have increased their manufacturing processes 4 times in Europe, and GM has made serious investments in Australia. There are many factors that made these large corporations look towards investing outside America's borders like: the increasing importance of raw materials and oil of other countries, the fact that the labor was paid with less value, the outside opportunities, and many others.

I believe that while many MNCs did increase in number during that period, many of them still viewed foreign operations as secondary to domestic operations because investing in an unknown territory is riskier. Also facing foreign government's policies could influence in a negative way the process of work and the transports. Knowing almost all the possible outcomes of a business in the U.S., based on financial forecasting and other means, made the managers of these large corporations focus their activities inside American borders.

I also believe that these managers were not short-sighted in not pursuing more international activity because they were only cautious. The reasons for which I say I believe they were cautious and wanted to keep their business safe are stated above.

During the '60s the foreign capital of American banks has grown from 3.5 billion dollars to 460 billion dollars in 5 years. Fast Food retailers like KFC, McDonald's and companies like Nike have opened an enormously large number of stores and subsidiaries abroad. Same thing did corporations from the heavy industry and from the chemical industry. As a consequence to this, the U.S. corporations' abroad sells in the '90s were five times larger than the America's exports.

Also, while many multinational corporations have known an important growth abroad, they faced resistance from foreign competitors. People from politics, businessmen, and academic people have join into a battle against these companies because they believed that the corporations have reached a power greater than the power of some single states. This is also a motive to the fact that many large corporation managers have not focused on investing abroad.