Multinational Corporation and Value Chain

A Multinational Corporation can be defined as enterprises which own or control production or service facilities outside the country in which they are based (definition by the UN; Czinkota, 1992; page 298). Inditex can be classified as a multinational since they offer their services in 800 outlets in 25 countries all over the world, although the production is done in Spain, its home country. It also follows some of the appropriate strategies to trade abroad

I feel that transnational cooperation’s have had a large impact on globalisation. A transnational corporation (Multinational Corporation) TNC is a corporation or enterprise that manages production establishments or delivers services in at least two countries such as Coca Cola and Nike. Very large multinationals have budgets that exceed those of many countries. Multinational corporations can have a powerful influence in international relations and local economies and play an important role in globalisation. I feel that the economy is the most significant motivating force

* Multinational Enterprise - A large company with substantial resources that perform various business activities through a network of subsidiaries and affiliates located in multiple countries. They carry out research and development procurement, manufacturing and marketing activities wherever in the world the firm can reap the most advantages. Typical MNE's include Barclays, Disney and Samsung etc

Multinational corporations are companies that have branches and operations in two or more countries. These companies are the main results of globalization, since they operate all over the world as if it was one country. Multinational corporations have a home country which contain their headquarters and offices for management and have host countries in which their operations take place. The home countries of multinational corporations are usually developed countries that have great capitals and the host countries are developing countries due to the low costs of labor, raw materials, and taxes paid to the governments.

The rapid development of economy promotes the development of multinational companies, which have become a general form rather than a special form of a company. Multinational companies carry a lot of money, production technology, management expertise and sales channels to expand their business around the world. There is no doubt that multinational companies will become the subject of an act of international relations and play an increasingly large impact on international relations.

Multinational corporation’s main goals are to improve revenue and profits by keeping the costs down, and to maximize profits for its shareholders.

The rapid pace of Globalization has led to a change in the global economy during the past several decades; it is believe that factors such as trade liberalisation, access to cheaper labour and resources, similarity of consumer demand around the world, and advances in technology and communication has widened the market of consumption, investment as well as production on a global scale. These globalization driven factors created new challenges and global competition for businesses around the world thus as a response many companies decided to expand their operation across national borders in order to be competitive. A company that operates their business in at least one country other than its country is called Multinational

The relationships with MNC’s represent perhaps the most important form of foreign-direct investment in China. Central and provincial/municipal governments clearly recognize the benefit of getting MNC’s to work with local companies, seeing opportunities to rapidly develop and improve the condition of Chinese companies just through exposing them to world-class management practices and technology. By piggybacking on the experience of cutting-edge western firms, China can quickly move through the fast track of technological development. This expertise will be necessary as the government seeks to manage the sheer breakneck pace by which the economy is growing, and the pressure is further underpinned by the political restlessness and social fragility of the nation’s large population.

There are many multinational companies which operate on such a high level worldwide such as Walmart, a multinational company is basically a corporation that is known to be registered in more than one country or that functions in different operations within a couple of countries. Multinational companies may consist of function between both procedures of selling goods or providing a service within different countries or continents. “Multinational companies, many of them extremely big, are today the most powerful agents of innovation” (Mattes, J. 2010)

A MNC contrasts marginally from a transnational partnership (TNC), on the grounds that while MNC 's are generally national organizations with outside backups, a TNC does not distinguish itself with one national home. In any case, these terms are regularly utilized reciprocally. Multinational organizations can have an effective impact in neighborhood economies, and even the world economy.

With the process of globalization and internationalization, multinational firms develop rapidly. What is the multinational firm? It should be called multinational corporation (MNCs) which is more academic. An MNC is a company physically active in more than one country, like McDonald, Nestle, Ford etc.

This is brought to you by the decline of trade tariffs, in which corporations are increasingly taking advantage of. They are looking overseas to outsource for cheap foreign labour and new markets. Developing countries openly welcome MNCs to their countries with expectations of employment and economic growth. They try to persuade the MNCs by offering incentives such as tax breaks, government subsidies and lax regulations.

The objective of MNC to operate in other countries is to gain competitive advantage through several ways. Firstly, MNC is able to take advantage of difference in country-specific circumstances. For example, MNC may choose to locate its productions in less developed country like Vietnam to gain cheap labor cost. Secondly,

These reasons may be seen as a countries ‘expectations’ when attracting the MNC’s foreign investment and over the last 30 years have proved to be a dominant contributor to the growth of developing countries (Jajri, 2009).

A multinational company (MNC) is a business that operates beyond its geographical boundaries of its country of origin by opening branches or dealing with associates in more than one country. In other words, it is a company that engages in foreign direct investment (FDI). MNCs organize processes of manufacturing and delivering of goods and services to market in various countries, using their production firms either locally or abroad. To be able to operate in other countries, a company must be registered in these individual countries. The headquarters of multinationals are usually in the country of origin, with partly or fully owned subsidiaries abroad. Today, the world is increasingly becoming a global village. With Internet technology,