A multinational corporation (MNC) is a company that is incorporated in one country but has operations in many other countries. Key features of MNCs include huge assets and turnover, international operations through branches, centralized control from headquarters, advanced technology, and professional management. Advantages for host countries include job creation, foreign investment, improved infrastructure, and technology transfer, while advantages for home countries are access to cheaper resources and wider markets abroad. However, both host and home countries face some limitations like loss of local industries, cultural challenges, and competition from other large MNCs.

1. MULTINATIONAL
CORPORATION

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Meaning of Multinational Companies (MNCs):
A multinational company is one which is incorporated in one
country (called the home country); but whose operations
extend beyond the home country and which carries on
business in other countries (called the host countries) in
addition to the home country.
It must be emphasized that the headquarters of a multinational
company are located in the home country. A multinational
corporation is known by various names such as: global
enterprise, international enterprise, world enterprise,
transnational corporation etc.

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Features of Multinational Corporations
(MNCs)
(i) Huge Assets and Turnover
(ii)International Operations Through a Network of Branches
(iii)Unity of Control
(iv)Mighty Economic Power
(v)Advanced and Sophisticated Technology
(vi)Professional Management
(vii)Aggressive Advertising and Marketing
(viii)Better Quality of Products

4. 4
Advantages of MNCs from the
Viewpoint of Host Country
(i) Employment Generation
(ii) Automatic Inflow of Foreign Capital
(iii)Proper Use of Idle Resources
(iv)Improvement in Balance of Payment Position
(v) Technical Development
(vi)Managerial Development
(vii)End of Local Monopolies
(viii)Improvement in Standard of Living
(ix)Promotion of international brotherhood and culture

5. 5
Limitations of MNCs from the Viewpoint
of Host Country
(i) Danger for Domestic Industries
(ii) Repatriation of Profits: (Repatriation of profits
means sending profits to their country)
(iii)No Benefit to Poor People
(iv)Disregard of the National Interests of the Host
Country
(v) Misuse of Mighty Status
(vi)Careless Exploitation of Natural Resources
(vii)Selfish Promotion of Alien Culture
(viii)Exploitation of People, in a Systematic Manner

6. 6
Advantages from the Viewpoint of the Home
Country
(i) MNCs usually get raw-materials and labour supplies
from host countries at lower prices; specially when host
countries are backward or developing economies.
(ii) MNCs can widen their market for goods by selling in
host countries; and increase their profits. They usually
have good earnings by way of dividends earned from
operations in host countries.
(iii)Through operating in many countries and providing
quality services, MNCs add to their international
goodwill on which they can capitalize, in the long-run.

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Limitations from the Viewpoint of the
Home Country
(i) There may be loss of employment in the home country, due to
spreading manufacturing and marketing operations in other
countries.
(ii) MNCs face severe problems of managing cultural diversity.
This might distract managements’ attention from main business
issues, causing loss to the home country.
(iii)MNCs may face severe competition from bigger MNCs in
international markets. Their attention and finances might be
more devoted to wasteful counter and competitive advertising;
resulting in higher marketing costs and lesser profits for the
home country

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