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  1. 1. Multinational corporations Presented by:- Dhanashri Bhoir – 15 Meenal Kawale – 16 Shridhar Kadam – 17 Ritesh kelkar - 20 1
  2. 2.  An enterprise operating in several countries but managed from one (home) country. Multinational companies(MNCs) are the organizations or enterprises that manage production or offer services in more than one country. 2
  3. 3. 1. Big size2. Huge intellectual capital3.Operates in many countries4.Large number of customer5.Large number of competitors6.Structured way of decision making 3
  4. 4.  To expand the business beyond the boundaries of the home country. Minimize cost of production, especially labour cost. Capture lucrative foreign market against international competitors. Avail of competitive advantage internationally. 4
  5. 5. Contd.. Achieve greater efficiency by producing in local market and then exporting the products. Make best use of technological advantages by setting up production facilities abroad. Establish an international corporate image. 5
  6. 6. British Ford ReebokPetroleum Motors SkodaVodafone LG motors Sony and many more
  7. 7.  Expanding the production Capacities beyond the Demand of the Domestic Country. Serve Competition in the Home Country. Limited Home Market. Nearness to Raw Materials. Availability of Quality Human Resources at Low Cost. To Increase Market Share. 7
  8. 8. 1. MNCs create employment opportunities in the host countries. It helps to create a pool of managerial talent in the host country.2. Helps removal of monopoly and improve the quality of domestic made products.3. Promotes exports and reduce imports by raising domestic productions.4. Goods are made available at cheaper price due to economies of scale. 8
  9. 9. 5. Job and career opportunities at home and abroad in connection with overseas operations.6. Encourages the world unity and all resulting in world harmony 9
  10. 10. 1. The host county is likely to lose its economic sovereignty2. The host nation may also experience some loss of control over its own economy3. Feeling that labour is being exploited by the MNC/ Outsourcing4. Lost of cultural moorings5. The problem of DumpingExample – Chinese products are priced low in Indian market. 10
  11. 11. Fastest Growing economyHuge market potentialFDI attractivenessLabor competitivenessMacro economic stability
  12. 12.  500 largest MNCS control over ½ of global trade flows and 1/5 of global GDP. 90% of world’s 500 largest MNCs are in North America, Japan and Europe More than 40% of the total exports of China is done by MNCs affiliates. BP (British petroleum) operates in more than 100 countries. Marks & Spencer sources its goods from more than 70 countries. 12
  13. 13.  India is the home of a number of multinational companies since the country’s market was liberalized in 1991. Initially The MNC from United States account 37% of turnover of first 20 firm operated in India Now scenario has changed a lot more enterprises from European union like Britain, France, Netherlands, Italy, Germany, Belgium and Finland have come to India and outsourced their work to this country Example Finnish mobile giant Nokia has their second largest base in India
  14. 14.  Many indian firms have slowly and surely embarked on global path and lead to the emergence of Indian multinational companies. Some instances are: Tata Motors sells its passenger car Indica in UK through a marketing alliance with Rover and has acquired a Daewoo Commercial vehicles unit giving it access to markets in korea and china Ranbaxy is the ninth largest generics company in the world. An impressive 76% of its revenue come from overseas
  15. 15.  Asian paints is among the 10 largest decorative paints maker in the world and has manufacturing facilities across 24 countries Infosys has 25,634 employees including 600 from 33 nationalities other than Indian. It has 30 marketing offices across the world and 26 global development centers in US, Canada, Australia, UK and Japans 15
  16. 16. 1 16
  17. 17. Factor mobility.Development incommunication Economic reforms. technology.Risk minimize. Growth urge. Market potential. 17
  18. 18.  An organizational structure consists of activities such as task allocation, coordination and supervision, which are directed towards the achievement of organizational aims. It can also be considered as the ‘viewing glass or perspective’ through which individuals see their organization and its environment. Many organizations have hierarchical structures, but not all. 18
  19. 19. Foreign control overTransfer pricing and key sectors of the sourcing. economy. Technological Competition and monopoly. market Leadership. 19
  20. 20.  Increasinginternational competition. Global consumer awareness. Technological advancement. Reduction in friction among nations. World Business Community coming together. Growing role of private sector inn developing countries. 20
  21. 21.  Regional economic Integration. Increase in the number of bilateral treaties that promote FDI has increased considerably. Privatization programmes. 21
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