Discuss The Advantages And Disadvantages Of Mncs

Company has evolved to handle joint ventures, but not all of them turn into successes.

It also requires more of an investment and commitment by the international company which creates a higher risk. There is also the down side of having difficulty managing local resources.

Multinational Corporation - business enterprise with manufacturing, sales, or service subsidiaries in one or more foreign countries, also known as a transnational or international corporation. These corporations originated early in the 20th century and proliferated after World War II.

Partnering and strategic alliances involves working together for the mutual benefit of not only each other, but for the organization (Goetsch & Davis, 2016, p. 64). There are many benefits to partnering. Partnering continually improves processes and products as well as relationships between the organization and its suppliers (Goetsch & Davis, 2016, p. 65). It also improves overall satisfaction of the customers (Goetsch & Davis, 2016, p. 65). Partnering is not limited to those who the organization deals with outside the company. Internal partnering is just as important (Goetsch & Davis, 2016, p. 68). Partnering and forming strategic alliances both within the company an outside the company creates a competitive advantage over other organizations and more opportunities by opening up new markets and increasing the skills and capabilities of the employees within the organization (Goetsch & Davis, 2016, p. 65).

To be qualified as a multinational company (MNC), two criterions need to be fulfilled. Firstly, it needs to have substantial direct investments in foreign countries. Secondly, these international operations need to be actively managed (Bartlett, Beamish, 2014). Since

Multinational company : An organization with multi country affiliates, each of which formulates its own business strategy based on perceived market differences.

Chase, R.B., Jacobs, F. R., & Aquilano, N.J. (2006) Operations management for competitive advantage (11th ed). New York: McGraw Hill/Irwin

The World Investment Report of 2009, published by the UNCTAD (United Nations Conference on Trade and Development), states there is a total of 889,416 multinational companies (MNCs) around the world: 82,053 parent corporations and 807,363 affiliates.

MNC’s/TNC’s are companies that locate their factories in various places throughout the world. This gives countries more jobs, access to the global market, cheap manufacturing and large profits.

The Multinational Corporation (MNC) manager must have a broader set of skills than a manager of a smaller business. The MNC manager should be extremely flexible, able to speak another language, and be culturally

This academic paper will be exploring the key term, joint ventures. This concept is of interest because in today’s business environment due to the economy downfall, many organizations recourse to this strategy in order to easily infiltrate in a foreign market. Companies are seeking more opportunities to expand their market share and a joint venture is an attractive option to do so. Getting involved with a foreign market come with several obstacles and challenges. It is for the same reason that organizations engage in a joint venture whit a partner that knows and understand the culture and preferences of that specific nation.

It is because through the joint venture, the company is more familiar with the situation of the company there. The negative outcome is that the management system different between the company. So it is hard to make a decision making. It is because there is different opinion of each person.

A multinational corporation (MNC) is a corporation that operating in two or more countries, known as host countries but managed from one country, known as home country. Multinational Corporation is also known as international corporation (Wikipedia, 2011). Besides that, MNC can be defined as a corporation that derives revenues from operations in countries other than home country (BusinessDictionary, 2011).

The disadvantages of a partnership is they also have unlimited liability allowing them also to become sewed by creditors. Partnerships also can have partner disagreements which can cause a business to get off the goal that they are trying to achieve. In some cases disagreements can not be resolved and partnerships have to split up. If the partners of the business split up or one of the partners want out the assets of the business become frozen until the partnering wanting out gets their share of the business.

• It takes time and effort to build the right relationship and partnering with another business can be challenging. Problems are likely to arise if: