Multinational Corporations And The Global Economy

Multinational corporations are organizations that work in numerous nations. They likewise help to keep up the worldwide predominance of the Industrialized Nations just by working together sustaining universal stratification. MNC may have a few premiums like overseeing mining operations in a few nations, fabricating merchandise in others, and market its items around the world. The essential recipients are dependably the Industrialized countries, particularly the one in which the multinational partnership has its reality home office. In their quest for benefits, the multinational corporations require helpful power elites at all industrialized countries. The MNC dependably require positive business atmosphere in type of low

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

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

“Tell me, is there some society that doesn’t run on greed? What is greed? Of course, none of us are greedy, it is only the other fellow that’s greedy. The world runs on individuals pursuing their separate interests.” - Milton Friedman (2002)

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).

Multinational corporations are companies that that has at least one facility in another country than its home country. A good example of a multinational corporation is Nestle, Bacardi, Proctor & Gamble and Intel. These companies have offices and/or factories in other countries where they coordinate global management. While having facilities in other countries is a great way to cut costs and to create jobs in other countries, there are some disadvantages that should be taken into account regarding this practice as well.

As per definition of Pitelis and Sugden (2000, p.72), Multinationals (MNC’s) are corporations that operate in more than one country. Until recently, multinationals from developed economies had the primary control over the global market. They created opportunities, made acquisitions, made FDI’s in emerging markets. They were also sharing their knowledge and experiences with SME’s in emerging economies. The flows to a great extent were one way, however in the last few years, a considerable two way relationship has developed. The main reasons for the change in the set of circumstance has been due to the emergence of companies from rapidly developing economies, from what SME’s have learned from the knowledge and experience shared by

multinational corporation (MNC) is a corporation or enterprise that manages production establishments or delivers services in at least two countries. Very large multinationals have budgets that exceed those of many countries. Multinational corporations can have a powerful influence in international relations and local economies. Multinational corporations play an important role in globalization; some argue that a new form of MC is evolving in response to globalization (Wikipedia) 1

Multinational Corporations are the economic powerhouses of globe. These corporations bring an influx of wealth, power and resources. With the introduction of Corporations in other countries it brings employment opportunities, technological advancements and in best case scenarios raises standards of living; However the cons of Multinational corporations are increasing and in some cases getting out of hand. We are seeing increasing cases of companies forgoing waste management laws and disposal standards as well as the exploitation of workers either violating child labor policies or underpaying employees both in state and internationally. This is creating serious harm the the environment as well as the harm to the well being of those employed. Often times these negative consequences are the reverse of the benefits, yes there are job opportunities that might have not been available before but at 50 cents an hour how much is truly beneficial.

The companies mainly focuses of their innovation, strategic management and organizational structure to expand their business in international level.According to the United Nations Conference on Trade and Development (UNCTAD, 2013), the outward foreign direct investment (OFDI) by firms from these economies accounted for 30.6% of the global (OFDI) flows, which was $1.39 trillion in 2012.The above statement is a crystal clear proof that emerging economies like China, Brazil, Russia and India are working towards the restructuring of their international business. MNC’s from emerging economies, although diverse, have displayed some common characteristics that differ from their counterparts from developed countries (Xueli Huang, 2015).Emerging economies lack so many aspects like the know-how of that particular industry, the technology required by these business enterprise, but in spite of all the lack of primary resources they have cherished because the home government of emerging economies plays a vital role in helping to get the resources for them to expand the business.

Multinational Corporation may be defined as a group of people who works together in a private sector that produces whether goods or services and also brings into existence financial surpluses as target and also own assets used for production in more than one national unit in a global complex of nation states. The examples of multinational corporation companies are Coca Cola, Air France, chevron and so many others. Some of their advantages is that they operates massively, their assets and sales run into billions of dollars and make supernatural profits. They also operate all over the world, their control resides in the hand of individual organization but its interest and transaction spreads across national boundaries. It is also oligopolistic in structure, this occurs through the process of merger and turnover, they acquire awesome power coupled with it giant size makes in oligopolistic in character. They grow in a spontaneous and unconscious manner. They also operates in collective transfer of assets or resources which takes place in form of packages like equipment, machineries , raw materials, finished products and also managerial services. These are some of the benefits, it provides advanced technology and other technologies that are not in the host country, it also provides advanced capital internally and externally and gives a country the privilege to access global capital market. It allows the host country has access to superior global distribution and marketing

Every organisation dreams to be multinational enterprises (MNEs), and if it’s not the global environment is forcing companies regardless of their location or primary market base, to consider the rest of the world in their competitive strategic formulation. Firms cannot isolate themselves from or ignore external factors such as economic trends, competitive situations, or technology innovation in other countries if some of

The demand for global service market increases rapidly. The global flow of talents along with the expansion of multinational business are brought in by global technical transmission and economic cooperation. Therefore a multinational company has become a significant participant of globalization.

Almost all businesses aim to brunch out of their home environment into the global market. Multinational management has become very popular with the modern society because of globalization and expansion of businesses. For a business to expand into other countries, there are certain factors they need to take into consideration to ensure they are able to operate successfully.

Moving to new country is never easy for any organization and lot of brainstorming and research needs to be done before offering the product in completely new arena. A fundamental shift has been occurring in the world economy. There has been a move away from a world in which national economies were relatively isolated from each other by barriers to