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Multi National Companies

(MNC)

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Multinational corporate structure

Horizontally integrated multinational corporations manage production establishments located in different countries to produce the same or similar products. (example: McDonald's)

Vertically integrated multinational corporations manage production establishment in certain country/countries to produce products that serve as input to its production establishments in other country/countries. (example: Adidas)

Diversified multinational corporations manage production establishments located in different countries that are neither horizontally nor vertically nor straight, nor non-straight integrated. (example: Microsoft or Siemens A.G.)

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Micro-multinationals

A new breed enabled by Internet based communication tools.

Employees, clients and resources located in various countries.

Use of internet, cheaper telephony and lower traveling costs.

Internet tools like Google, Yahoo, MSN, Ebay, Skype and Amazon make it easier for the micro-multinationals to reach potential customers in other countries.

Service sector micro-multinationals, like Indigo Design & Engineering Associates Pvt. Ltd.

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CONTENTS

What is an MNC?

Benefits & Threats to host countries

Threats to MNC

MNC in INDIA & its advantages

India’s Big Dream

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Definition

A multinational corporation (MNC) is a business with extensive international operations in more than one foreign country.

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Benefits to host countries

MNC’s generate jobs &income

Training of local workers in new & potentially transferable skills

Technology transfer

Cost reduction

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India’s Big Dream

Harnessing the global trends by encouraging the MNCs to engage in product innovation for local consumers represents a big challenge in India.

Policy-makers, industry leaders and academic institutes need to work together to create and disseminate a list of "dream innovations" that will inspire people.

The development of Tata Motor's Rs 1 lakh car provides a powerful example

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International powers of MNC’s

International - Large MNC’s influence in international relations

Tax competition- Tax breaks, pledges of govt. assistance etc.

Market withdrawal-Eg. Pharmaceutical companies

Lobbying & Patents

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Threats to MNC

Nationalization

Lack of Govt. assistance

Opposition by local traders.

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MNC In India

MNC in India are attracted to:

India’s large market potential

Labor competiveness

FDI attractiveness

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MNC In India

MNC in India represent a diversified portfolio of companies representing different nations.

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Advantages of MNC in India

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