INTERNATIONAL Business…

“MNCs IN INDIA & CRITICISM OF MNCs”

VAIRAKUMAR R

2nd M.Com (A)

Marian College Kuttikkanam

Multinational Companies

A multinational corporation/ company is an organization doing business in more than one country.

These companies have sales office and manufacturing facilities in many country.

A corporation (MNCs) engaged in various activities like exporting, importing, manufacturing in different countries.

MNCs have worldwide involvement and a global perspective in its management and decision making.

MNCs In India….

FIRST MNC in the World…

EAST INDIA COMPANY:

On 31 December 1600, a group of merchants who had incorporated themselves into the East India Company were given monopoly privileges on all trade with the East Indies. The Company's ships first arrived in India, at the port of Surat, in 1608.

 The British Crown assuming direct control of India in the form of the new British Raj.

First MNC in India…International Business Machines Corporation (IBM):

International Business Machines, or IBM, nicknamed "Big Blue“.

It is a multinational computer technology and IT consulting corporation.

Headquartered in Armonk, New York, United States.

IBM manufactures and sells computer hardware and software.

Founder: Charles Ranlett Flint

Ginni Rometty is the president, chairman and CEO of IBM.

It is one of the world's largest computer companies and systems integrators.

With over 400,000 employees worldwide as of 2014.

It has twelve research laboratories worldwide.

The company has scientists, engineers, consultants, and sales professionals in over 175 countries.

Revenue: 81.74 billion USD ($3.5 billion from India 2015)

First Indian MNC….

INFOSYS: Established in 1981.

Infosys is a NYSE listed global consulting and IT services company with more than 197,000 employees.

From a capital of US$ 250, they have grown to become a US$ 9.75 company with a market capitalization of approximately US$ 41.0 billion.

It became the first IT company from India to be listed on NASDAQ.

Its employee stock options program created some of India's first salaried millionaires.

It enable clients in more than 50 countries.

Founders: N. R. Narayana Murthy K. Dinesh, Nandan Nilekani, Ashok Arora,  S. D. Shibulal, Kris Gopalakrishnan,  N. S. Raghavan

CEO: Vishal Sikka

Revenue: 9.501 billion USD (2015).

10 MNCs In India….

Microsoft corporation Nokia Corporation

Nestle Coca Cola

Procter and Gamble International Business Machines (IBM)

PepsiCo Sun Pharmaceutical

Sony Corporation City Group

Types of MNCs

Manufacturing MNCs

Trading MNCs

Servicing MNCs

Vertical MNCs

Horizontal MNCs

Diversified MNCs (conglomerate)

Merits of MNCs….

Foreign investments and Economic development.

Growth of domestic industries.

Increased export & Tax revenue.

Globalization of Economy.

Research & Innovation.

Benefits to domestic customers.

Role of MNCs in India…..

Promotion Foreign Investment (Liberalized foreign investment)

Non-Debt Creating Capital inflows (inflow of foreign exchange reduce and remove the Deficit in the BoP.)

 Technology Transfer:

 Promotion of Exports

 Investment in Infrastructure (power projects, modernization of airports and posts, telecommunication.)

Criticism of MNCs in India….

They are interested more on M&A and not on fresh projects.

They have raised very large part of their financial resources from within the country.

They supply second hand plant & machinery declared obsolete in their country.

They are mainly profit oriented and have short term focus on quick profit. National interest and problems are generally ignored.

They have exporting huge profits to their Home country.

They make no effort to adopt an appropriate technology suitable to the needs. Moreover, transfer of technology proves very costly.

Once an MNC gains foothold in a venture, it tries to increase its holding in order to become a majority shareholder.

Further, once financial liberalizations are in place and free movement is allowed.

They prefer to participate in the production of mass consumption and non-essential items.

REFERENCE

International Business: P Subba Rao – Himalaya Publications

International Journal of Scientific Research: Dr. Ashok Pawar – Volume-2 (Issue 10, Oct-2013)

International Business : Dr. A.J. George, Anish Thomas

www.economicsdiscussion.net www.yourarticlelibrary.com www.sscnet.ucla.edu www.infosys.com www.ibm.com

THANK YOU ALL….