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    Saroj Kumar Behera PGDM 2 Year Iimt BBSR

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    Ashok Subramaniam
    MNCs are large corporations that operate in multiple countries. They have over 250,000 foreign affiliates worldwide. MNCs organize operations across borders through branches, subsidiaries, joint ventures, franchises, or turnkey projects. They expand internationally to access new markets, leverage marketing and financial superiorities, transfer technology, and innovate products. While MNCs stimulate growth, some argue they prioritize profits over social welfare and pose threats to national sovereignty.

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    Saroj Kumar Behera PGDM 2 Year Iimt BBSR

    Uploaded by

    Ashok Subramaniam
    48 views12 pages
    MNCs are large corporations that operate in multiple countries. They have over 250,000 foreign affiliates worldwide. MNCs organize operations across borders through branches, subsidiaries, joint ventures, franchises, or turnkey projects. They expand internationally to access new markets, leverage marketing and financial superiorities, transfer technology, and innovate products. While MNCs stimulate growth, some argue they prioritize profits over social welfare and pose threats to national sovereignty.

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    MNCs

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    MNCs are large corporations that operate in multiple countries. They have over 250,000 foreign affiliates worldwide. MNCs organize operations across borders through branches, subsidiaries, joint ventures, franchises, or turnkey projects. They expand internationally to access new markets, leverage marketing and financial superiorities, transfer technology, and innovate products. While MNCs stimulate growth, some argue they prioritize profits over social welfare and pose threats to national sovereignty.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    48 views12 pages

    Saroj Kumar Behera PGDM 2 Year Iimt BBSR

    Uploaded by

    Ashok Subramaniam
    MNCs are large corporations that operate in multiple countries. They have over 250,000 foreign affiliates worldwide. MNCs organize operations across borders through branches, subsidiaries, joint ventures, franchises, or turnkey projects. They expand internationally to access new markets, leverage marketing and financial superiorities, transfer technology, and innovate products. While MNCs stimulate growth, some argue they prioritize profits over social welfare and pose threats to national sovereignty.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 12

    Saroj Kumar Behera

    PGDM 2ND YEAR


    IIMT BBSR
    MULTINATIONAL
    CORPORATIONS
    (MNCs)
    MULTINATIONAL
    CORPORATIONS
    (MNCs)
    MNCs, also known as TNCs are huge
    industrial organizations which extend their
    industrial and marketing operations through
    a network of their branches or their majority
    owned foreign affiliates (MOFAs).

    There are now 40,000 MNCs with 2,50,000


    overseas affiliates throughout the world.
    A multinational company can organize it’s
    operations in different countries either of the
    following five alternatives
    • Branches
    • Subsidiary Companies
    • Joint venture companies
    • Franchise holders
    • Turnkey Projects
    REASONS FOR GROWTH
    The manifold reasons are
    1. Expansion of market territory
    2. Marketing Superiorities
    3. Financial Superiorities
    4. Technological Superiorities
    5. Product Innovation
    Expansion of market territory

    As the operations of a large sized firm


    expand and as it’s international image builds
    up it seeks more and more extension of it’s
    activities beyond the physical boundaries of
    the country in which it is incorporated.
    MARKETING SUPERIOROTIES
    • It possesses a more reliable and up-to-date
    market information system
    • It enjoys market reputation and faces less
    difficulty in selling it’s product
    • It adopts more effective advertising and
    sales promotion techniques
    Financial Superiorities
    • It has huge financial resources to turn
    adverse situation in favor
    • It maintain high level of fund utilization by
    generating funds in one country and using
    them in another
    • It has easier access to external capital
    markets
    OBJECTIVES OF MNCs
    • To expand the business beyond the boundaries of a home
    country
    • Minimize cost of production, especially labor cost
    • Capture lucrative foreign market against international
    competitors
    • Make diversification internationally effective so that a steady
    growth of business could be achieved
    • Make best use of technological advantages by setting up
    production facilities abroad
    • Counter regulatory measures in the parent country
    BENEFITS RECEIVED FROM MNCs
     Investment, income and employment
     Transfer of technology
     Increase in export and decrease in import
     Equalizing cost of factor of production around the world
     Integration of national economy into the world economy
     Contribution to research and development
     Stimulation to domestic enterprise
     Quality improvement and reduced domestic monopoly
     Increased standard of living
     Professionalization of management in the host country
     Improve balance of payment position
     MNCs are profit making organizations which pay high
    dividends, motivating resource mobilization among
    investors in host country
    OPPOSITION LINES OF ARGUMENT
    • It does not stand for social welfare, rather profit maximization
    • Misutilisation of power and flexibility
    • MNCs can have unfavorable effect on the balance of
    payment position of the country through outflow of large
    sums of money in the form of dividends, profits, royalties,
    interest, technical fees , and so on leading to an increasing
    volume of remittance which rose from 72.25 crore in 1969-70
    to 813.5 crore in 1989.
    • MNCs can cause distraction and cause monopoly powers in
    the long run
    • A grave threat to sovereignty of the nations
    • Direct and indirect interference in the political and other
    strategic affairs
    • depletion of nonrenewable natural resources

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