A complete description about the MNC

1. Project Report
On
Multinational
Corporation
Submittedto: Submittedby:
Dr. Surya Rashmi Rawat Atul Sharma (5219)
Prince Thakur(5325)
Ajay Thakur(5207)
ManojKumar(5237)
RajatLoomba(5249)
Vikas (5285)

2. INTRODUCTION
A multinational corporation/company is an organization doing business
in more than one country. Transnational company produces, markets,
invests, and operates across the world. It is integrated global enterprise
which links global with global market at profit. These companies have
sales offices and/or manufacturing facilities in many countries. A
corporation (MNC) engages in various activities like exporting,
importing, manufacturing in different countries. MNCs have worldwide
involvement and a global perspective in its management and decision-
making.
1.MNCs consider opportunities throughout the globe through they do
the business in a few countries.
2.MNCs invest considerable portion of their assets internationally.
3.MNCs engage in international production and operate plants in the
number of countries.
4.MNCs take managerial decision based on a global perspective. The
international operations are integrated into the corporations overall
business.
MNCs are huge industrial/ business organizations. They extend their
industrial/ marketing operations through a network of branches or their
majority owned foreign affiliates. MNCs produce the products in one or
few countries and sell them in most of the countries. Transnational
corporations produce the products in each country based on the specific
needs of the customers of that country and market these. A
transnational corporation mostly uses the inputs of the host country
where it operates unlike a multinational company.

3. HISTORY
The history of the multinational is linked with the history of
colonialism. Many of the first multinationals were
commissioned at the behest of European monarchs in order to
conduct expeditions. Many of the colonies not held by Spain or
Portugal were under the administration of some of the world's
earliest multinationals. One of the first arose in 1600:the British
East India Company, which took part in international trade and
exploration, and operated trading posts in India.
Other examples include the Swedish Africa Company, founded in
1649, and the Hudson's Bay Company, which was founded in the
17th century.
Features of a MultinationalCompany
1. High Turnoverand Many Assets
MNCs operate on a global scale. Which means they have huge
assets in almost all countries in which they operate. Their
turnovers can also be incomprehensibly large. For example,
Apple has a market capitalization of 1 trillion dollars. This is
bigger than the entire economy of Saudi Arabia!
2. Control
MNCs have unity of control. So while they have many branches
in many countries, the main control will remain with the head
office in its country of origin. The business operations in the host
country have their own management and offices, but the ultimate
controlwill still remain at the head office.

4. 3. Technological Advantages
As we saw earlier, an MNC has at its disposal huge amounts of
wealth and investments. This allows them to use the best
technology available to boost their products and their company.
Most companies also invest huge money in their Research &
Development Department to invent and discover new
technological marvels.
4. Management by Professionals
An MNC is run by very competent and capable individuals. They
have suitable managers to take care of their business operations
technology, finances, expansion etc. And they are also able to
attract the top talent to their corporations due to their resources
and their reputations.
5. Aggressive Marketing
MNCs can spend a lot of their money on marketing, advertising,
and promotional activities. They target an international audience,
so effective marketing becomes necessary. Aggressive marketing
allows them to capture the market and sell their products globally.
List of Multinational Companies in India
 Microsoft
 Apple
 LTI
 Deloitte
 Coca Cola

5. OBJECTIVES
The fundamental objective of an MNC is to earn profit and this
might clash with the host government’s objective of achieving a
better quality of life for its citizens. Such conflicts need to be
resolved by the MNC using their initiative. Following are the
financial goals of MNC and their subsidiaries:
 Minimize the cost of production, especially the labour cost.
 Capture the lucrative foreign market against international
competitors.
 Avail the competitive advantage internationally.
 Achieve greater efficiency by producing in local markets
and then exporting the products.
 Make the diversification intentionally effective so that a
steady growth of business could be achieved.
 To safeguard the company's interest in order to get behind
the tariff walls.
 Make the best use of technological advantages by setting
up production facilities abroad.
 Establish an international corporate image.
 Counter the regulatory measures in the parent country.
 Manufacture in those countries where it finds the greatest
competitive advantage.
 To expand the business beyond the boundaries of the home
country, where they were originally established

6. Advantages of Multinational Companies –
MNC’s
As one can imagine, there are a lot of merits of having a
multinational corporation exist and function in an economy. They
also bring many advantages to the consumers as well. Let us see
some merits of an MNC in both the host country and the home
country.
Merits of a MultinationalCompaniesin a Host
Country
 One of the main advantages to the host country is that MNCs
boost their economic growth. They bring with them huge
investments and capital. And then through subsidiaries , joint
ventures branches, factories they promote rapid industrial
growth. In fact, MNCs are known as the messengers of
progress.
 A multinational corporation helps the technological growth of
the country as well. They bring new innovations and
technological advancements to the host country. They help
modernize the industry in developing countries.
 MNCs also reduce the host countries dependence on imports.
Imports reduce while exports from the country see a rise.
 All MNCs have enormous capital and resources at their
disposal. A good portion of such resources is invested in
R&D. This can be very beneficial to the host countries where
they set up their R&D facilities.

7.  Multinational corporations also promote maximum utilization
of the country’s resources. This, in turn, leads to economic
development.
Merits of Multinational Companies in the Home
Country
 MNCs make their home countries (country of origin) very
rich by their revenues. The corporation will collect fees,
royalties, profits, charges from all their host countries and
bring them back to the home country. This huge inflow of
foreign exchange is very beneficial to the home country.
 MNCs provide a means of co-operation between developed
countries and developing or underdeveloped countries. This
allows both to benefit from the partnership.
 And these multinational corporations also help promote
bilateral trade relations between countries. This is beneficial
to both the countries and the global market and economy.
 A multinational corporation only has a profit motive. Their
interests may not align with the national interests of the host
country and be harmful to their economy and development
 In some host countries, the presence of MNCs can restrict
competition and may even cause a monopoly or monopolistic
competition.
They also charge heavy fees and charges in their host countries. And
move all the profits to their home country. This outflow of foreign
exchange can be detrimental to the host country.

8. CONCLUSION
Multinational companies need to evaluate social
responsibility, employee devilment, competitors, and customers
in accordance with business ethics. The companies can operate well
if they follow cultural practices in countries where they operate. In
addition, they should consider the regulations and ethical framework in
countries where they operate.
From the discussion, it appears that combining business and ethics is
somewhat difficult. While international businesses have to respond to
social issues, their aim is to make profits. Often, the public good is
not considered or given less priority. As such, multinational consider
profitability before evaluating the governing ethics. For
multinational companies to grow in terms of sales and profits, it is
vital for them to consider business ethics. The companies should
develop ethics initiatives build on cultural, regulatory, and ethical
frameworks of the countries where they operate in. As such, the
companies can establish business ethics that that are acceptable
and contribute to their growth.
The multinational corporation is the only organization which has
the resources and scope to think, to plan, and to act with
worldwide planning of markets and sources.