Multi national companies and their impact

1. MULTINATIONAL COMPANIES
Muhammad Usman

2. What is MNC ??

3. Examples of MNCs
o Royal Dutch Shell
o China National Petroleum Corporation
o Walmart
o Total
o Toyota
o IBM

4. History And Evolution of MNCs
o These corporations originated early in the 20th century
and expanded after World War II.
o A multinational corporation develop new products in its
native country and manufacture them abroad.
o Almost all the earliest and largest multinational firms
were either American, Japanese, or West European.

5. WORLD’S TOP MNCs

6. Ranks by revenue(2013)

7. Impact of MNCs
MNCs can have revenue in the billions of
dollars. Thus their operations can have a significant
impact on the economies of states, whose GDP’s are
sometimes smaller than MNC revenues. E.g.
Wal-Mart: revenue larger than the GDP’s of all but 35
states.

8. Shell & Pakistan
Shell
• Total Revenue 2013
$481.235 billion (2013)
Pakistan
• Budget 2014
$245 billion (2014)
(nominal)

9. Social Impacts
MNCs have social impact through
 Media
Because most of the media is owned by owners of MNCs
so they can change the social trends over the world.
 Public Figures

10. Economical Impacts
Multinational corporations play an important role in the
world economy through the process of economic
globalization; in other words, the increasing economic
interdependence of national economies across the world
through a rapid increase in cross-border movement of
goods, services, technology and capital.

11. Continue …
National and local governments often compete with one
another to attract MNC facilities, with the expectation of
increased tax revenue, employment, and economic
activity. To compete, political entities may offer MNCs
incentives such as tax breaks, pledges of governmental
assistance or subsidized infrastructure, or lax
environmental or labor regulations.

12. Political Impacts
• Multinational corporations affect local and national
policies by causing governments to compete with each
other to be attractive to MNCs investment in their
country.
• Multinational corporations often hold power over local
and national governments through a monopoly on
technological and intellectual property. Because of their
size, multinationals can also have a significant impact on
government policy through the threat of market
withdrawal.

13. Examples
• Certain parts of Mexico illustrate the drawbacks of
globalization — farmers in northwestern states sell
produce to California while suffering from malnutrition
and poor labor conditions.
• Iraq and Afghanistan war.
• East India company and Pakistan

14. Continue…
• Walmart is an example of a large multinational
corporation that often exerts influence on political
processes through lobbying, contributions to campaigns,
and threats of market withdrawal.
• India is an example of a country that, economically, has
benefitted from globalization — it has seen rapid GDP
growth and has a growing middle class with a rising
standard of living.

15. Advantages of MNCs
o Transfer of technology, capital and entrepreneurship.
o Increase in the investment level and thus, the income and
employment in the host country.
o Greater availability of products for local consumers.
oIncrease in exports and decrease in imports.

16. Disadvantages of MNCs
o Trade restrictions imposed at the government-level
o Limited quantities (quotas) of imports.
o Effective management of a globally dispersed
organization.
o Slow down in the growth of employment in home
countries.
o Destroy competition and acquire monopoly.

17. Conclusion
After all we can say that only power which is
ruling over the world is MNCs. And they have every type
of impact over the world so they can do any thing
anywhere in the world which they want.