mnc’s (multinational companies)

MNC’S (MULTINATIONAL COMPANIES)

Submitted to – Prof.Hemshweta Rathore

By Gurjit Kaur Kaler

CONTENTS

What is MNC?

Features

Advantages and disadvantages

MNC’s in India

WHAT IS

MNC' A corporation that has its facilities and otherassets in at least one country other than its homecountry. Such companies have offices and/or factoriesin different countries and usually have a centralizedhead office where they co-ordinate globalmanagement.

They are also known as transnational corporations(TNC).

FEATURES

Giant Size

Area of Operation

High Efficiency

Product/service organization

Ownership and control

Profit motive

ADVANTAGES TO HOME COUNTRY

MNC's create opportunities for marketing the products produced inthe home country throughout the world.

They create employment opportunities to the people of home countryboth at home and abroad.

It gives a boost to the industrial activities of home country.

MNC's help to maintain favourable balance of payment of the homecountry in the long run.

Home country can also get the benefit of foreign culture brought byMNC's.

ADVANTAGES TO HOST COUNTRY

The investment level, employment level, and income level of the hostcountry increases due to the operation of MNC's.

The industries of host country get latest technology from foreigncountries through MNC's.

The host country's business also gets management expertise fromMNC's.

The domestic traders and market intermediaries of the host countrygets increased business from the operation of MNC's.

MNC's create competition among domestic companies and thusenhance their competitiveness.

DISADVANTAGES TO HOME COUNTRY

MNCs share innovative and advanced technologies and equipmentswith host countries that allows such countries to reduce theirdependence on parent/home country

MNC's transfer the capital from the home country to various hostcountries causing unfavourable balance of payment.

As investments in foreign countries is more profitable, MNC's mayneglect the home countries industrial and economic development.

DISADVANTAGES TO HOST COUNTRY

MNC's may kill the domestic industry by monopolising the hostcountry's market.

MNC's may transfer outdated technology from their home countryand reserve the latest one.

They do not operate under the purview of local govt. and they alsomake a lot of profit so they may pose a threat to economicsovereignty of nation.

In order to make profit, MNC's may use natural resources of the hostcountry indiscriminately and cause depletion of the resources.

TOP TEN MNC’S IN INDIA

1. Microsoft

2. IBM

3. Nestle

4. Procter and gamble

5. Cocola

6. PepsiCo

7. Citigroup

8. Sony

9. Hewlett Packard(HP)

10.Apple Inc.

REFERENCES

http://www.quora.com/What-are-the-characteristic-features-of-MNCs

http://www.preservearticles.com/2012010319694/what-are-the-advantages-and-disadvantages-of-multinational-corporations.html