Meaning and definition A multinational corporation/company is an organisation doing business in more than one country. 'In other words it is an organisation or enterprise carrying on business in not only the country where it is registered but also in several other countries. It may also be termed as international corporation, global giant and transnational corporation. According to the United Nations a multinational corporation is an enterprise which owns or controls production or service faci
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  Meaning and definition  A multinational corporation/company is an organisation doing business in more than one country. 'In other words it is an organisation or enterprise carrying on  business in not only the country where it is registered but also in several other countries. It may also be termed as international corporation, global giant and transnational corporation.  According to the United Nations a multinational corporation is an enterprise  which owns or controls production or service facilities outside the country in  which it is based . In the words of W H Moreland, Multinational Corporations or Companies are those enterprises whose management, ownership and controls are spread in more than one foreign country . Thus a multinational company carries on business operations in two or more countries. Its headquarters are located in one country (home country) but its activities are spread over in other countries (host countries). MNC's may engage in various activities like exporting, importing, manufacturing in different countries. It may also lend its patents, licences and managerial services to firms in host countries. Characteristics of Multinational Companies (MNCs) The distinctive features of multinational companies are as follows. 1.   Large Size :  A multinational company is generally big in size. Some of the multinational companies own and control assets worth billions of dollars. Their annual sales turnover is more than the gross national product of many small countries. 2.    Worldwide operations :  A multinational corporation carries on business in more than one country. Multinational corporations such as Coco cola has branches in as many as seventy countries around the world. 3.   International management : The management of multinational companies are international in character. It operates on the basis of best possible alternative available any where in the  world. Its local subsidiaries are managed generally by the nationals of the host country. For example the management of Hindustan Lever lies with Indians. The parent company Unilever is in The United States of America. 4.   Mobility of resources :  The operation of multinational company involves the mobility of capital, technology, entrepreneurship and other factors of production across the territories. 5.   Integrated activities :  A multinational company is usually a complete organisation comprising manufacturing, marketing, research and development and other facilities. 6.   Several forms :  A multinational company may operate in host countries in several ways i.e.,  branches, subsidiaries, franchise, joint ventures. Turn key projects.  Aims Multinational companies make investments in different countries with the following aims. (a) To take tax benefits in host countries; (b) To exploit the natural resources of the host country; (c) To take advantage of Government concessions in host country; (d) To mitigate the impact of regulations in the home country; (e) To reduce cost of production by making use of cheap labour and low transportation expenses in the host country. (f) To gain dominance in foreign markets; (g) To expand activities vertically. FEATURES OF MNC: 1.WORLD WIDE OPERATION The multinational companies extend their operation to two or more countries.They establish parent office in one country and extend branches ,subsidiary and affiliation to other countries. 2.CREATE MAXIMUM OPERATION The multinational companies are extended to many countries.People can grasp the opportunity People can join the multinational companies according to their capabilities. Manpower can be  well utilized in the multinational companies.   3.ADVANCED TECHNOLOGY Multinational companies invest a huge amount of money on research and development of latest technology. Therefore transfer advanced technology to developing countries through subsidiaries and branches, 4.HIGH EFFICIENCY  Advanced technology are used are for multinational companies. So, manpower can give well training  which increase efficiency of manpower. Due to this cause, the multinational companies can provide large volume of quality products at cheaper price. 5.Monopolistic Market Generally, multinational companies supply large quantities of quality products and services in the international market.So they create a separate brand name and capture a large area of foreign market. Sometimes they even control a huge market through trade marks and patent right. 6.Product/service organization  A multinational company is based on product/service which produces a mass production of  varieties of goods and services. The company consists own trade mark,patent right ,copy right and technology for production and distribution of such goods in the international market. 7.Ownership and control The ownership of such company is shared by both parent company and branch companies as per their capital investment.However parent company manages and control the operation of its  branches and subsidiary through trade mark, technology, and patent right. IMPORTANCE OF MNC: The establishment of multinational companies has been good boon all over the  world..Some of its importance are as follow: 1.TRANSFER OF CAPITAL AND TECHNOLOGY The multinational companies transfer investment ,advance technology to developing countries through establishing branches  and subsidiaries. Therefore developing countries like Nepal get benefited of receiving Advanced technology and capital investment through such companies. 2.Mass production  With help of advanced technology, the can produce quality goods and products at cheaper price.Due to Job innovation and specialization help to produce more consumption increase as production in more unit reduce cost. 3.INCREASE IN EMPLOYMENT OPPORTUNITY:  A multinational company requires a large number of skilled as well as unskilled employees to operate its activities. Thus it provides employment opportunity to the people of host country as a result economic standard of society is improved. 4.INCREASE IN GOVERNMENT REVENUE  A multinational company is a large scale business.It pays a large amount of duties ,income tax, vat,etc to government. Therefore Government revenue is increased due to operation of such companies. 5.RESEARCH AND DEVELOPMENT: In complete world, it is need of Research and Development. To meet international standard of its products and services ,a multinational company conducts several research and development activities.Constantly such programs are beneficial to society. It helps to develop better equipments, quality products and advanced technology in production. 6.GOOD INTERNATIONAL RELATION:  A multinational company recognizes the country in the international market. It creates harmonious relation between parent company and subsidiary countries. It recognizes exporting country to all over the world.... Rationale The current financial crisis has spurred a heated debate on the need to rethink economic globalization in light of its social and environmental impact, particularly on developing countries, and has led to various proposals to strengthen the regulatory framework within which international markets are (or should be) embedded. The external context seems therefore highly propitious for the launching of an interdisciplinary master's  programme centred on the interrelated themes of social regulation, standard-setting and sustainable development.


Jul 23, 2017
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