MNC/ TNC operates in multiple countries through foreign direct investment. It generates significant revenue from foreign markets and has many foreign employees. It can enter foreign markets through joint ventures, subsidiaries, or mergers and acquisitions. The UNCTC outlined duties for MNCs in host countries like respecting laws and human rights, but was never approved. Corporate social responsibility has grown in importance, with companies voluntarily regulating themselves regarding economic, social and environmental impacts.

1. MNC/ TNC
• Carries out business operations in more than one country. Such facilities are
acquired through the process of FDI
• Benchmarks used to define ‘multinationality’
• Operates in several countries
• Generates significant share of total revenue from foreign market
• Has significant ratio of foreign to total number of employees
• Directly control foreign investment
• Mode of Entry
• Joint Venture
• Setting up subsidiaries
• M&A
• Benefits to Host Nation

2. International Code of Conduct on transnational
Corporations (UNCTC)
• Brought out in 1980 by the UN but never approved.
• UNCTC covered a range of MNC duties in the host state such as –
1. Respect the national sovereignty and observance of domestic laws, regulations and
administrative practices
2. Adherence to economic goals and development objectives, policies and priorities
3. Adherence to socio-cultural objectives and values
4. Respect for human rights and fundamental freedom
5. Non- interference in internal political affairs and intergovernmental relations
6. Abstention from corrupt practices
7. Apply good practices in relation to payment of taxes
8. Abstention from involvement in anti-competitive practices
9. Consumer and environmental protection
10. Disclose relevant information to host country governments

3. Corporate Social Responsibility
• Gained increased significance in recent years
• CSR is a voluntary, corporate-driven initiative to promote self-regulation as a
substitute for regulation at national or international level.
• CSR is a self-regulating business model that helps a company be socially
accountable to itself, its stakeholders, and the public.
• By practicing CSR, companies can be conscious of the kind of impact they are
having on all aspects of society, including economic, social, and
environmental.
• The 1992 Earth Summit in Rio de Janeiro explicitly endorsed voluntary
approaches and is considered modern CSR’s birth
• ILO’s Tripartite Declaration of Principles concerning multinational enterprises
and social policy and OECD;s guidelines for multinational enterprises are two
most prominent sources of CSR standards

4. Companies Act 2013
• Section 135 rw schedule VII