Multinationals Company [ MNC ]

Multinationals Company [ MNC ]

Multinationals have diverse presence to Act Globally Think Locally!

A Multinational Company shortly called as MNC, it have their presence globally with diverse units spread based on operations,management and administration. It is a foreign company in native country where is founded. The company actually extending business operations across the native country this leads to called as Globalization. It means extension of economic activities across the boundaries of a country in search of worldwide markets. Due to Globalization whole world is a one big market. These Big companies are coming out of their home countries in search of better markets for their products.

Simply, A multi-national company which is registered as a company in one country but carries on business operations in a number of other countries by setting up factories, branches or subsidiary units. A company may produce goods or arrange services in one or more countries and sell these in the same or other countries as Global market.

Features of Multinationals

  • International Operations :   Multinational Companies generally have production, marketing and other facilities in several countries.
  • Large Size :  The volume of sales, the profits earned, and also the value of assets held by a multinational companies are generally very large.
  • Centralized Control: The branches and subsidiary units of an MNC operating in different countries are controlled from the headquarters of the company in the home country, which lay down broad policies to be pursued.
  • Dynamic worldwide network

Advantages

The MNCs enjoys several benefits as huge earnings due to large scale productions, marketing and distribution across worldwide.

Investment of Foreign capital: Direct investment of capital by multinational companies helps under-developed countries to speed up their economic development.

Generation of employment: Expansion of industrial and trading activities by multinational companies leads to creation of employment opportunities and raising the standard of living in host countries.

Use of advanced technology: With substantial resources multinational companies undertake Research and Development activities which contribute to improved methods and processes of production and thus, increase the quality of products.

Growth of ancillary units: Suppliers of materials and services and ancillary industries often grow in host countries as a result of the operation of multinational companies.

Increase in exports and inflow of foreign exchange: Goods produced in the host countries are sometimes exported by multinational companies. Foreign exchange thus earned contributes to the foreign exchange reserves of host countries.

Healthy competition: Efficient production of quality goods by multinational companies prompt the domestic producers to improve their performance in order to survive in the market.

Skill Workforce: MNC skilled and training’s up to International Standards.

Limitations

MNCs have least priorities for host country as they invest in profitable areas rather priority area of host country. Acquiring Monopoly power in domestic market competition. It also bring changes in tradition of host country customer consumption.

 

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