2. Contents
① Definition
② Organization
③ Globalization
④ Pros & Cons
⑤ Diffussion of org.knowledge
⑥ Economics and Politics
⑦ Examples of MNC’s
⑧ MNC’s in Russia
⑨ Inditex – operation in Russia
3. Definition
Multinational Corporation is a business organization whose activities are
located in more than two countries and is the organizational form that
defines foreign direct investment.
The economic definition emphasizes the ability of owners and
their managerial agents in one country to control the operations
in foreign countries.
4. Organization of multinational corporations
• The United States
International
division
Problems:
Area division
and Product
division
More responsive
to local
differences and
tastes
• Price set by
domestic
market – not
competitive
• Products did
not correspond
to foreign
tastes
• Managers
across areas
did not
cooperate
Advantages
Disadvantages
5. Organization of multinational corporations
Europe
*Holding company structures
*banks or other financial institutions played powerful
roles in ownership
*complex financial webs
*subsidiary and a headquarters that held a portfolio
consisting of ownership control over dozens of
companies, in the same sector but located in different
countries.
6. Globalization
Due to implementing new digital technologies, the gap between
poor and rich countries is increasing
Local and national governments always try to attract MCs because it is a
huge investment into the economy, they provide employment, choice of
multi goods and etc.
7. Pro’s & Con’s
Pro’s Con’s
Advanced technology and
low-cost products.
Workers and natural
resources
Spread Technology Social Protection Fall
Cheapest sources of labour Manipulation
Have a wider market Global competition
Economies of scale in
marketing and distribution
Foreign influence
12. MNC’s in Russia
• are global players
The largest by
foreign assets
and foreign sales
The leader
in production
Global energy
business:
- entry into new
markets;
- diversification;
- ensuring consumers
supplies
Entities in
many countries
13. The example of Inditex in Russia
-Based In Arteixo (Spain)
-The largest clothing
retailer in the world
-5,500 stores
worldwide
-274 stores in Russia
- Inditex is not among
the biggest retailers
in Russia
-the Spanish group’s
revenues went up 20
percent in 2011 to
13.6 billion rubles
(about $433 billion)
- In terms of revenue,
the Spanish company is
the 47th largest retailer
in Russia
15. Which countries are against multinational Corporations and
which are not?
Name three Pro’s and three Con’s of Multinational
Corporations
What was the classic organizational problem that different
national structures met?
Name the one MNC in each country that you have heard
What is the largest MNC in Russia and why ?
