Multinational

Corporations
 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.

Meaning
 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
The manifold reasons are
1. Expansion of market territory
2. Marketing Superiorities
3. Financial Superiorities
4. Technological Superiorities
5. Product Innovation

REASONS FOR GROWTH

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

Features of MNC
Why are MNC’s in India
Huge market potential of the country

FDI attractiveness

Labor competitiveness

Macro-economic stability

One billion plus population

Cont……
India ranked 10th largest economy, 4th largest in
terms of Purchasing Power Parity

250-300 million middle class

Gross Domestic Product (GDP) growing at over8-9

%, makes it one of the fastest growing economies in
the world

Lucrative and diverse opportunities for U.S.

exporters with the right products or services
Top Ten Brands in the World
IBM
Microsoft
LG
Toyota
Samsung
Nokia
Hyundai
Fiat
Nike
Ford
Sony
1. Asian Paints 1. Microsoft
2. Bharat Forge 2. Nokia
3. Essel Propack 3. Toyota
4. Hindalco
4. Intel
5. ICICI bank
5. Coca-Cola
6. Infosys
6. Sony
7. Tata Motors
8. TCS 7. IBM
9. Larson & Toubro 8. General Electric
10. Aptech / NIIT 9. Nike
10. Citigroup

Some Indian MNC’s

1. British Petroleum
2. Vodafone
3. Ford Motors
4. LG
5. Samsung
6. Hyundai
7. Accenture
8. Reebok
9. Skoda Motors
10. ABN Amro Bank

Major Companies operating in

India
Increase investment level
Transferring the technology
It increase host country exports & reduce its imports
Integrating national economy
Implementing new innovations
Increase competition

Merits of MNC’s
May acquire monopoly power
Underestimate local culture
Think of about profits rather than host country
interest
Inflexibility in terms & conditions
Heavy use of non-renewable natural resources

De-merits of MNC’s
 MNCs create employment opportunities in the host
countries. It helps to create a pool of managerial
talent in the host country.
 Helps removal of monopoly and improve the quality of
domestic made products.
 Promotes exports and reduce imports by raising
domestic productions.
 Goods are made available at cheaper price due to
economies of scale.
 Job and career opportunities at home and
abroad in connection with overseas
operations.
 Encourages the world unity and all resulting in world
harmony.

MERITS OF MNC
The host county is likely to lose its
economic sovereignty
The host nation may also experience
some loss of control over its own economy
Feeling that labour is being exploited by
the MNC/ Outsourcing
The problem of Dumping

DEMERITS OF MNC
1 Reliance Industries
2 Oil & Natural Gas
3 State Bank of India Group
4 Indian Oil
5 National Thermal Power
6 Icici Bank
7 Steel Authority of India
8 Tata Steel
9 Tata Consultancy Services
10 Tata Motors

11 Bharti Airtel
12 Wipro
13 GAIL (India)
14 ITC
15 Infosys
16 Punjab National Bank
17 Bharat Petroleum
18 Canara Bank
19 Hindustan Lever
20 Sterlite Industries (India)