Submitted by: Taranjeet Kaur 12051 MBA 1st sem

WHAT IS AN MNC ???

MNC stands for MULTINATIONAL CORPORATION

It is a corporation that

Manages production

And/or

Delivers services

In more than one country

 Any

company or a group that operates in many countries but is managed in a single country (home country) is a multinational company or multinational corporation As ILO report says, The essential nature of the multinational enterprises lies in the fact that its managerial headquarters are located in one country (home country) while the enterprise carries out operations in a number of other countries as well (host countries).

INTERNATIONAL CORPORATION
(KOUTONS)

GLOBAL CORPORATION
(PEPSI)

TYPES
MULTINATIONAL CORPORATION
(MICROSOFT, IBM)

TRANSNATIONAL CORPORATION
(AUDI, BMW)

1ST MNC In world

Dutch east India company IBM RANBAXY LABORATIES Ltd

1ST MNC In INDIA

1ST Indian MNC

Advantages

To the Host Country

To the Home Country

 Availability

of latest technology
expertise from MNCs

Management Increase

in investment level, employment level and income level in exports and decrease in imports.

Increase

 Acquisition

of raw materials from abroad.

Opportunity

of marketing the products all over the world opportunity

Employment

Benefit

of foreign culture Maintain favorable balance of payment in long run

Adoption of ethnocentric approach in staffing leading to unemployment in host country Discourage the domestic rate of saving & investment by making capital investment in the host country Slow down in the growth of employment in home countries.

Transfer the capital from the home country to various host countries causing unfavorable balance of payment

 Technological

gap. Undertaking the initial risk. Development of basic economic infrastructure. Foreign exchange gap.

MNCs in India

One billion plus population. India is ranked as the 11TH largest economy in terms of nominal GDP , 3RD largest in terms of Purchasing Power Parity(PPP). Opportunities for U.S. exporters with the right products or services. Easier access to capital.

Economic growth Reduction in Unemployment Technology gap Initiating a higher level of investment Excellent training grounds Undertaking initial risks
17

Outsourcing Centers for key processes setup by various MNCs R&D Outsourcing Pharmaceuticals, Engineering, IT, Telecom Product development centers (Telecom, IT)

 Encouraged

demonstration effect Competition with small scale industries Providing prohibited goods Unfair trade practices Fluctuation in investment Production of profitable goods.

MNCs have both merits and demerits.. Special precautions should be undertaken to avoid demerits. Due to the MNCs, Competition has increased and more employment opportunities are available.. AND soon INDIA will be as we Dream off!!!