The dynamics of the business environment fostered by the drastic political changes in the erstwhile communist and socialist countries and the economic liberalization across the world have enormously expanded the opportunities for the multinational corporations, also known by such names as international corporation, transnational corporation, global corporation (or firm, company or enterprise) etc.
Multinational Corporations
The dynamics of the business
environment fostered by the drastic political changes in the erstwhile
communist and socialist countries and the economic liberalization across the
world have enormously expanded the opportunities for the multinational
corporations, also known by such names as international corporation, transnational
corporation, global corporation (or firm, company or enterprise)
etc.
The rapidity with which the MNC’s
are growing is indicated by the fact that while according to the world
investment report 1997, there were about 45000 mnc’s with some 280000
affiliates. According to the world investment report 2001, there were over
63,000 of them with about 822,000 affiliates.
Only less than 12 % of these
affiliates were in the developed countries. China was host to about 3.64 Lakh
of the affiliates (i.E., More than 44% of the total) compared to more than 1400
in india. The MNC’s accounts for a significant share of the world’s industrial
investment, production, employment and trade.
Definition
And Meaning
“A corporation that controls
production facilities in more than one country, such facilities having been
acquired through the process of foreign direct investment, firms that
participate in international business, however large they may be, solely by
exporting or by licensing technology are not multinational enterprises.”
The various benchmarks sometimes
used to define “multi nationality” are that the company must:
- Produce (rather than just
distribute) abroad as well as in the headquarters country
- Operate in a certain minimum number of nations (six
for example)
- Derive some minimum percentage of
its income from foreign operations (e.G., 25%)
- Have a certain minimum ratio of
foreign to total number of employees, or of foreign total value of assets
- Possess a management team with geo-centric
orientations.
- Directly control foreign
investments (as opposed simply to holding shares in foreign companies).
Tags : Business Environment and Law-Global Trends In Business And Management
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