1. Faculty of Management studies
M.D.S University, Ajmer
Presented in class of : By – Group -10
Dr. Ashish Pareek Avant
Hitesh Prajapat
Naresh Chand Gurjar
Ravi Jain
Shiv Bahadur Singh
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3. Meaning
Definition
History of MNCs
Objectives
Reason for the growth of MNCs
Favorable impact of MNCs
Harmful effect of MNCs
MNCs in India
Liberalization and MNCs
Future of MNCs
A Critique of MNCs
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4. An enterprise operating in several
countries but managed from one
(home) country.
 Generally, any company or group that
derives a quarter of its revenue from
operations outside of its home country
is considered a multinational
corporation.
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5. “Mr. Jacques Maisonrouge, president , IBM
world trade corporation describe MNCs”:-
 It operates in many countries at different
levels of economic development.
 Its local subsidiaries are managed by
nationals.
 It maintains complete industrial
organisation including R&D facilities in
several countries.
 It has a multinational central management.
 It has multinational stock ownership.
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6. According to the ILO
“The
essential nature of the multinational
enterprises lies in the fact that its
managerial headquarters are located in
one country, while the enterprise
carries out operations in a number of
other countries as well”.
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7.  Multinational business operation is not a
new concept.
 The British east India company, Hudson’s
bay corporation and Royal Africa companies
are example of MNCs.
 The post second world war period has
however, witnessed a changing hand in
colonialism and there emerged a new thrusts
for industrial and technological development
as well as rise of the USA as the largest
industrial power.
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8. .
 The Dutch East India Company was the first multinational
corporation in the world and the first company to issue
stock It was also arguably the world's first mega
corporation possessing quasi-governmental
powers, including the ability to wage war, negotiate
treaties, coin money , and establish colonies.
 The first modern multinational corporation is generally
thought to be the East India Company. Many corporations
have offices, branches or manufacturing plants in different
countries from where their original and main headquarters
is located.
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9. 1. Big size
2. Huge intellectual capital
3.Operates in many countries
4.Large number of customer
5.Large number of competitors
6.Structured way of decision making
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10.  To expand the business beyond the
boundaries of the home country.
 Minimize cost of production, especially
labour cost.
 Capture lucrative foreign market against
international competitors.
 Avail of competitive advantage
internationally.
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11. Objectives
 Achieve greater efficiency by producing
in local market and then exporting the
products.
 Make best use of technological
advantages by setting up production
facilities abroad.
 Establish an international corporate
image.
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12. Factor mobility.
Development in
communication Economic reforms.
technology.
Risk minimize. Growth urge.
Market potential.
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13. 1. MNCs create employment opportunities in
the host countries. It helps to create a pool
of managerial talent in the host country.
2. Helps removal of monopoly and improve
the quality of domestic made products.
3. Promotes exports and reduce imports by
raising domestic productions.
4. Goods are made available at cheaper price
due to economies of scale.
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14. 5. Job and career opportunities at home and
abroad in connection with overseas
operations.
6. Encourages the world unity and all
resulting in world harmony
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15. 1. The host county is likely to lose its
economic sovereignty
2. The host nation may also experience some
loss of control over its own economy
3. Feeling that labour is being exploited by the
MNC/ Outsourcing
4. Lost of cultural moorings
5. The problem of Dumping
Example – Chinese products are priced low in
Indian market.
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16.  India is the home of a number of multinational companies since
the country’s market was liberalized in 1991.
 Initially The MNC from United States account 37% of turnover
of first 20 firm operated in India
 Now scenario has changed a lot more enterprises from
European union like
Britain, France, Netherlands, Italy, Germany, Belgium and
Finland have come to India and outsourced their work to this
country
 Example Finnish mobile giant Nokia has their second largest
base in India

17. Fastest Growing economy
Huge market potential
FDI attractiveness
Labor competitiveness
Macro economic stability

18. British Ford
Reebok
Petroleum Motors
Skoda
Vodafone LG
motors
Sony and
many more

19. Many indian firms have slowly and surely embarked
on global path and lead to the emergence of Indian
multinational companies
Some instances are:
 Tata Motors sells its passenger car Indica in UK
through a marketing alliance with Rover and has
acquired a Daewoo Commercial vehicles unit giving
it access to markets in korea and china
 Ranbaxy is the ninth largest generics company in
the world. An impressive 76% of its revenue come
from overseas

20.  Asian paints is among the 10 largest
decorative paints maker in the world and has
manufacturing facilities across 24 countries
 Infosys has 25,634 employees including 600
from 33 nationalities other than Indian. It has
30 marketing offices across the world and 26
global development centers in
US, Canada, Australia, UK and Japans
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21. Pricewaterhousecoopers(PwC) gave a report
on April 30 2010 on emerging MNCs
They said India is expected to produce highest
number of MNCs overtaking China as the
emerging world largest source.
Over 2200 Indian Companies are likely to open
operations outside the country over next 15
years

22.  In India ,Liberalization measures initiated in 1991
opened up the entry of MNCs.
 Measures to minimize bureaucratic control were
also a part of 1991 policy. Which encouraged MNC
operating in India.
 Up to 51% of direct foreign equity was allowed in
high priority areas requiring heavy investment.
 100% foreign equity was permitted in high priority
industry.
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23.  The amendment of Central Govt. ordinance of
sept.27,1991, facilitated the entry of new MNCs on
the one hand and expansion of the existing ones on
the other.
 The provision restricting the acquisition of transfer
of share of MRTP undertakings in both MRTP act
and Companies act were deleted.
 New provisions as in section 108-A to 108-1 were
included, facilitating the transfer of shares in MRTP
companies and dominant undertakings.
 MNCs are now permitted to invest in India’s small
scale sector.
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24.  Increasinginternational competition.
 Global consumer awareness.
 Technological advancement.
 Reduction in friction among nations.
 World Business Community coming
together.
 Growing role of private sector inn
developing countries.
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25.  Regional economic Integration.
 Increase in the number of bilateral
treaties that promote FDI has increased
considerably.
 Privatization programmes.
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26. Foreign control over
Transfer pricing and
key sectors of the
sourcing.
economy.
Technological Competition and
monopoly. market Leadership.
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