MAIN CONTENTS<br />Definition of MNC ;<br />Multinational corporate structure ;<br />Corporate hierarchy ;<br />Factors leading to the growth of MNC;<br />Benefits of MNC ;<br />Code of conduct ;<br />
MULTINATIONAL CORPORATION<br />Multinational corporation (or Transnational corporation) (MNC/TNC) : is a corporation or enterprise that manages production establishments or delivers services in at least two countries . <br />
Definition: A multinational corporation is an enterprise that engages in foreign direct investment (FDI) and that owns and controls value added activities in more than one country.<br />
Multinational corporations play an important role in globalization ; some argue that a new form of MNC is evolving in response to globalization: the 'globally integrated enterprise'. <br /> MNC’s have existed since1602, in which year the first MNC, the Dutch East India Company, was established.<br />
According to MNCs,it represents a cluster of affiliated firms located in different countries that:<br /><ul><li> Are linked through common ownership
Respond to a common strategy</li></li></ul><li> MULTINATIONAL CORPORATE STRUCTURE<br /> Multinational corporations can be divided into three broad groups according to the configuration of their production facilities:<br />1.Horizontally integrated multinational corporations<br />2. Vertically integrated multinational corporations<br />3.Diversified multinational corporations<br />
PROCESS OF EVOLUTION<br /> <br />MNCs did not merge overnight.<br /> Domestic firms after going through various stages of the evolution process, qualify for being called as an MNC.<br /> The process of evolution can broadly be grouped in three successive stages. They are:<br /><ul><li>Trade
Openness of economic policies among large number of countries
Increase in competition</li></li></ul><li>BENEFITS OF MNC<br />Benefits from MNCs can be studied under two broad heads:-<br /><ul><li>Benefits to the host
Benefits to the home countries</li></li></ul><li>CODE OF CONDUCT<br />The multinational corporation shall :-<br /><ul><li>Respond affirmatively to the social and economic plans of the host country.
Seriously consider credible complaints and try to eliminate them .
Confirm to the established policies and the laws of the host country .</li></li></ul><li><ul><li>Supply appropriate information to local authorities about health, safety and environment effects of company‘s products .
Be concerned about human rights in decision making.
Provide clear statement of the basic mission and policies of the company </li></li></ul><li>WHAT MNC HAVE TO DO ?<br />MNCS need to respond in the following ways :-<br /><ul><li>Provide employment .
Helps build up foreign exchange reserves .</li></li></ul><li>CONCLUSION<br />To conclude, we would opine that MNC’s having a wide ambit is enviable to us, as to the fact that, there exists lots of job opportunity paves a path for the increase in National Income.<br /> And also to create a better society,<br /> with better standard of living,<br /> and it increases labour productivity ,<br /> decrease in unemployment, <br /> and also increases the net national income of the country. <br />This will help the government and this will lead to increase in the export and imports in the country.<br />