Business is Global: Interrelations in global bargaining power frameworks became shifted by the impact of global governance nowadays. The whole world is linked through internet based operations, financial markets, global problems, governmental alliances and business relations. Understanding this complexity is essential for multinational companies to succeed in the competitive environment: The Global Business. But also for the other player within the dynamic framework of global bargaining power it is important to understand the mechanism of interrelations and dependencies. This literature deals with the four main groups that build up together the Global Governance framework: National Governments, Trans-National Companies, Civil Society and International Organizations. Indeed, it takes the Trans-National Companies (TNC) into focus and explains the mechanisms that have impact on their bargaining power. As theoretical basis the ´Porters five forces model´ was taken in order to reconstruct the competitive environment. Later this model becomes modified and added by a sixth source, based on the studies of Aidan R. Vining. In the end the Hirschmann´s Voice and Exit Theory” is used to indicate the possible strategies to react on given global constellations. Each source and its impact on the bargaining power framework are analyzed explicit. In a second step the interrelations and mutual reactions are taken into focus. Last but not least this literature shows up options for TNC to conquer the mechanism, gain competitive advantage and increase bargaining power that leads to higher revenue in a business related sense.

Textprobe: Chapter 2.2, Porters 5 Forces Industry Analysis of TNCs: Figure 11 sums up the transformation of GAs to the Porter’s model. It illustrates the factors that influence the competitive environment in GG in terms of Global Power of TNCs. In the following it will be provided an analysis of the relevant forces and the competitive environment of TNCs on the GG layer in terms of GP. That analysis serves the purpose to detect the best fitting strategy for TNCs in order to increase the industry’s BP. 2.2.1, Rivalry: Strong competition among rival firms decreases profits and makes the industry less attractive. However, competition is not always perfect and firms are not only price takers, but strive for a competitive advantage over their rivals, too. The intensity of rivalry is influenced by a set industry characteristics. The traditional aspects are the volume of competitors, the market growth, the aspect of the entrance cost and exit costs, the switching costs and the level of product differentiation. Rivalry will be increased by a larger number of firms, because more firms must compete for the same purpose. Rivalry even intensifies, if the firms have similar market volume and impact. When looking at the TNCs as firms, who compete for GP, there is a large number of such. In comparison, there are a lot of global player coming from different countries, representing different intentions, but only less alternatives to influence a global decision making process, or a national decision making process, that affects the world globally (demand). In fact, there are in total sum 44,000 TNCs in the world, with 280,000 subsidiaries and an annual turnover of US$ 7,000 billion. Two-thirds of world trade results from TNC production networks. The share of world GDP controlled by TNCs has grown from 17 percent in the mid-60s to 24 percent in 1984 and almost 33 percent in 1995 (UNCTAD). 51 of the world's largest economies are in fact TNCs. Continuous mergers and take-overs have created a situation in which almost every sector of the global economy is controlled by a handful of TNCs. On a whole the total volume of TNCs is rather high however there is only little Global Power available. Due to that aspect, rivalry is high. If there is a growing market, firms are able to increase revenues simply because of the economic growth itself. A slow market growth causes firms to combat for market share and rivalry grows. Here we are talking about the market of GP in GG. The market size is only hard to measure. However it will be assumed that ongoing globalization is the factor that results in a growth in the market for assessing GP in GG. According to that argument, rivalry will be decreased within the industry of TNCs. When the majority of costs are fixed, the firm must produce near capacity to attain the lowest unit costs. Since the firm must sell a larger quantity of the product in order to benefit from economies of scale, high levels of production lead to a fight for market share and results in increased rivalry. In this case the ‘product’ TNCs produce is too abstract, to link it anyhow to fix or variable costs. What TNCs ‘sell’ is not their actual product (e.g. General Motors sells cars), but the influence they have in economy. As a result, it can be said that the more BP a TNC already has, the more influence it has, the lower costs every additional unit added. So the theory of economies of scale can be covered. However, there are no other fixed costs than the fixed costs of running the business anyhow. To sum up, it can be said that the fixed costs in the TNC´s industry are indifferent. However, there can be detected an economies of scale effect. Thus, rivalry in the existing market becomes higher. When a customer can freely switch from one product to another there is a greater struggle to capture customers. Low switching costs increase rivalry. The customer in our case is the national government (or International Organization) as GA who uses the BP of a TNC as product in order to benefit from it in terms of increasing its own GP. Switching costs may arrive when asking which TNC in detail to support. There might be done distinctions from TNCs operation industry (such as energy sector, security sector or media business). This notion leads to the argument of diversification of the product, which will be explained further. In addition here plays the linkage of the TNC an essential role If the TNC is somehow linked to activities with other GAs. Thought, switching costs in general are assumed to be high, not at least of the lack in trust, experience, information and transparency. Therefore rivalry rises. Low levels of product differentiation leads to higher levels of rivalry. The product itself is defined to be the GB. That influence can be differentiated first in the sense of the actual product offered. Textile producer may have an other channel of influence than companies in the energy sector. It can be detected that most of the TNCs are operating in the industry of petroleum exploiter, processor and distributor (see appendix 1 and 2). What exact relationship there exists is not part of this thesis, however it will be assumed that there must be ‘better preferred’ industriey. The second and probably related influence measure tool is the 3 dimensions of power approach. Each industry and each TNC concentrates on a different mixture of the power dimensions in providing power. On a whole there is a high level of product differentiation, and therefore a higher level of rivalry. High exit barriers place a high cost on abandoning the product. The firm is forced to compete. High exit barriers cause a firm to remain in an industry, even when the venture is not profitable. A common exit barrier is asset specificity. When a TNC wants to exit the industry, the barriers are low. Far from it! Other competitors or GAs would pay a high price in order to take over the business. That argument leads to a slightly decrease in rivalry. To sum up, rivalry in the TNC industry is relatively high, due to the large number of competitors, scale effects, and high level of product differentiation. There also exists an approach to make rivalry measurable by indicators of industry concentration. One instrument is the Concentration Ratio (further abbreviated as CR). The CR indicates the percent of market share held by the largest (4 - 50) firms within the industry. A high CR means less competition, whereby a low CR indicates a high competitive pressure. The industry is concentrated, when a high volume of market share is held by the (4 - 50) largest firms then the CR is high. With only a few firms holding a large market share, the competitive landscape is less competitive because it is closer to an oligopoly or to a monopoly. If the industry is characterized by many rivals from whom none of them has a significant market share, we see a low concentration ratio. Fragmented markets are more likely to be highly competitive.

• Global Governance

• Business Strategy

• Bargaining Power

• Porters five forces

• International Organizations

Diana Manuel´evna Mateo was born in Riga, Latvia (former Latvian Soviet Republic) in 1986. Her father studied at The Peoples' Friendship University of Russia (former Patrice-Lumumba-University) Moscow. Her mother studied engineering and civil aviation at the Leninkomsomol Rotbanner Institute. After a three year-period living in the Dominican Republic, her family entered the Federal Republic of Germany in 1989. Diana Mateo grew up trilingual in Berlin (German, Russian and Spanish). In 2008 Diana Mateo graduated as Bachelor of Arts in International Business from Cologne Business School - European University of Applied Sciences, Germany. During 2004 – 2008 she specialized on global questions and got involved into a variety of political, humanitarian and social projects. In 2003-04 Diana Mateo worked in close collaboration with the Centrum Judaicum – Stiftung Neue Synagoge”, the Federal Ministry of Education, Youth and Family Affairs”, and the State Europe School of Berlin” on the organization and implementation of the art-historical exhibition AHAWAH, aus Kindern wurden Briefe - AHAWAH, children became letters. In 2006 she participated in the International Councelor Program of the YMCA of the Triangle”. In North Carolina US she worked during a three month-period in an international environment on cultural development and social welfare. After graduation in 2008, she participated in an 8-month traineeship in the field of Global Investment Banking and Financial Trade at HSBC INKA in Duesseldorf, Germany. In 2010 she continued as MA in International Relations at the University of Kent (UK) and the Higher School of Economics Moscow (Russia).