Multi National Corporations by Neeraj Bhandari ( Surkhet.Nepal )
Meaning of Multinational
• When a company operates in a home nation established its
subsidiary in other nation it becomes an MNC and there
starts the process of globalization where in a local company
serves the entire worlds with its products and services.
• Multinational Corporations (MNCs) is a business unit which
operates simultaneously in different countries of the world.
In some cases the manufacturing unit may be in one
country, while the marketing and investment may be in
• Internet tools like Google, Yahoo, MSN, E-Bay, Skype,
Amazon make it easier for the MNC’s to reach their
potential customers in the country.
Features of MNC
2.Huge intellectual capital
3.Operates in many countries
4.Large number of customer
5.Large number of competitors 6.Structured way
of decision making
Why are MNC’s in India
• Huge market potential of the country
• FDI attractiveness
• Labor competitiveness
• Macro-economic stability
• One billion plus population
Top Ten Brands in the World:
Some Indian MNC’s:
• Asian Paints
• Tata Motors
• Tata Chemicals,
• United Phosphorus
Merits of MNC’s:
• Increase investment level
• Transferring the technology
• It increase host country exports & reduce its imports
• Integrating national economy
• Implementing new innovations
• Increase competition
• MNCs create employment opportunities in the host countries.
• It helps to create a pool of managerial talent in the host country.
• Helps removal of monopoly and improve the quality of domestic
• Goods are made available at cheaper price due to economies of
• Job and career opportunities at home and abroad in connection
with overseas operations.
• Encourages the world unity and all resulting in world harmony.
De-merits of MNC’s
• May acquire monopoly power
• Underestimate local culture
• Think of about profits rather than host country interest
• Inflexibility in terms & conditions
• Heavy use of non-renewable natural resources
• They are interested more on mergers and acquisitions
and not on fresh projects.
• The host county is likely to lose its economic
• The host nation may also experience some loss of
control over its own economy Feeling that labour is
being exploited by the MNC/ Outsourcing The problem
Role of MNc in India :
1.) Profit Maximization.
2.) International Network of marketing.
3.) Diversification Policy.
4.) Concentration in Consumer goods.
5.) Location of central control offices.
6.) Techniques to achieve Public Acceptability.
7.) Existence of Modern & Sophisticated Technology.
8.) Business but not social Justice.
9.) MNCs & Process of planned Economic Development in
10.) Cultural Explosion.