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Offline Mr. Patel

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Notes on Multinational corporations
« on: January 24, 2012, 04:09:57 PM »
Multinational corporations are business entities that operate in more than one country. The typical multinational corporation or MNC normally functions with a headquarters that is based in one country, while other facilities are based in locations in other countries. In some circles, a multinational corporation is referred to as a multinational enterprise (MBE) or a transnational corporation (TNC).
The exact model for an MNC may vary slightly. One common model is for the multinational corporation is the positioning of the executive headquarters in one nation, while production facilities are located in one or more other countries. This model often allows the company to take advantage of benefits of incorporating in a given locality, while also being able to produce goods and services in areas where the cost of production is lower.
Another structural model for a multinational organization or MNO is to base the parent company in one nation and operate subsidiaries in other countries around the world. With this model, just about all the functions of the parent are based in the country of origin. The subsidiaries more or less function independently, outside of a few basic ties to the parent.
A third approach to the setup of an MNC involves the establishment of a headquarters in one country that oversees a diverse conglomeration that stretches to many different countries and industries. With this model, the MNC includes affiliates, subsidiaries and possibly even some facilities that report directly to the headquarters.
The idea of a multinational corporation has been around for centuries. Some trace the origins of the concept back to the Dutch East India Company of the 17th century, as the corporate structure involved a presence in more than one country. During the 19th and 20th centuries, the idea of a company that functioned in more than one nation became increasingly common. In the 21st century, this business model continues to be highly desirable.
Characteristics:
1.   Head quarter in one country and i.e. Home country
2.   Operates in more than one countries
3.   Resources are at some extent unlimited
4.   Subsidiaries are scattered around the globe.
5.   Low cost of production.
6.   Huge investment in R & D.

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« Last Edit: January 01, 1970, 05:30:00 AM by Guest »

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Notes on Multinational corporations
« on: January 24, 2012, 04:09:57 PM »

 
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