2. An enterprise operating in several
countries but managed from one
(home) country.
Multinational companies(MNCs) are
the organizations or enterprises that
manage production or offer services in
more than one country.
2
3. 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
3
4. 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.
4
5. Contd..
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.
5
6. British Ford
Reebok
Petroleum Motors
Skoda
Vodafone LG
motors
Sony and
many more
7. Expanding the production Capacities beyond
the Demand of the Domestic Country.
Serve Competition in the Home Country.
Limited Home Market.
Nearness to Raw Materials.
Availability of Quality Human Resources at
Low Cost.
To Increase Market Share.
7
8. 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.
8
9. 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
9
10. 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.
10
12. 500 largest MNCS control over ½ of global trade
flows and 1/5 of global GDP.
90% of world’s 500 largest MNCs are in North
America, Japan and Europe
More than 40% of the total exports of China is done
by MNCs affiliates.
BP (British petroleum) operates in more than 100
countries.
Marks & Spencer sources its goods from more than
70 countries.
12
13. 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
14. 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
15. 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
15
18. An organizational structure consists of activities
such as task allocation, coordination and
supervision, which are directed towards the
achievement of organizational aims.
It can also be considered as the ‘viewing glass or
perspective’ through which individuals see their
organization and its environment.
Many organizations have hierarchical structures, but
not all.
18
19. Foreign control over
Transfer pricing and
key sectors of the
sourcing.
economy.
Technological Competition and
monopoly. market Leadership.
19
20. 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.
20
21. Regional economic Integration.
Increase in the number of bilateral
treaties that promote FDI has increased
considerably.
Privatization programmes.
21
