A PRESENTAION ABOUT MNCS

1. MULTINATIONAL CORPORATION
Its Role In International Factor Movement Presented by:
Kunal Kumar
PGDM 2nd SEM

2. What Is a Multinational Corporation (MNC)?
A multinational corporation (MNC) has facilities and other assets in at least one
country other than its home country.
A multinational company generally has offices and/or factories in different countries
and a centralized head office where they coordinate global management.
Some of these companies, also known as international, stateless, or transnational
corporate organizations, may have budgets that exceed those of some small
countries.

3. Types of Multinationals
There are four categories of multinationals that exist.
A decentralized corporation with a strong presence in its home country.
A global, centralized corporation that acquires cost advantage where cheap
resources are available.
A global company that builds on the parent corporation’s research and
development.
A transnational enterprise that uses all three categories.

4. What Makes a Corporation Multinational?
A multinational corporation (MNC) is one that has business operations in two or
more countries.
These companies are often managed from and have a central office headquartered
in their home country, but with offices worldwide.
Simply exporting goods to be sold abroad does not make a company a
multinational.

5. What Are Some Risks that Multinationals Face?
MNCs are exposed to risks related to the different countries and regions in
which they operate.
These can include regulatory or legal risks, political instability, crime or
violence, cultural sensitivities, as well as fluctuations in currency exchange
rates.
 People in the home country may also resent an MNC outsourcing jobs
abroad.

6. Role of multinational corporation in
international factor movement
 In international economics, international factor movements are movements of labor,
capital, and other factors of production between countries.
 International factor movements occur in three ways:
1. immigration/emigration
2. capital transfers through international borrowing and lending
3. foreign direct investment.

7. Role of multinational corporation in capital
movement
Agreement with Local Firms for Sale of MNCs Products:
A multinational firm can enter into an agreement with local firms for exporting
the product produced by it in the home country to them for sale in their
countries.
In this case, a multinational firm allows the foreign firms to sell its product in the
foreign markets and control all aspects of sale operations.

8. Role of multinational corporation in capital
movement
Setting Up of Subsidiaries:
The second mode for investment abroad by a multinational firm is to set up a wholly
owned subsidiary to operate in the foreign country.
In this case, a multinational firm has complete control over its business operations ranging
from the production of its product or service to its sale to the ultimate use or consumers.
A subsidiary of a multinational corporation in a particular country is set up under the
Companies Act of that country.

9. Role of multinational corporation in capital
movement
Branches of Multinational Corporation:
Instead of establishing its subsidiaries, multinational corporations can set
up their branches in other countries.
Being branches they are not legally independent business unit but are
linked with their parent company.

10. Role of multinational corporation in capital
movement
Foreign Collaboration or Joint Ventures:
• The multinational corporations set up joint ventures with foreign firms to
either produce its product jointly with local companies of foreign countries
for sale of the product in the foreign markets.

11. CONCLUSION
A multinational corporation (MNC) has facilities and other assets in at
least one country other than its home country.
Simply exporting goods to be sold abroad does not make a company a
multinational.
Multinational corporation play important role in international factor
movement.
International factor movements occur in three ways: immigration/emigration
capital transfers through international borrowing and lending foreign direct
investment.
Multinational corporation have big roles in all the immigration, capital
transfer.