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Multinational National Company(MNC)

Defination of Multinational Company(MNC)

Multinational companies are huge industrial organisations which 
extend their industrial and marketing operations through a network 
of their branches on their Majority Owned Foreign Affiliates (MOFAs). MNCs are also called as Transnational Corporations (TNCs). The word "multi" means many and "national" implies nations or countries. So, multinational companies can  be defined as giant firms with their headquaters located in one country and with variety of business operations in several other countries. These companies extend their operations beyond the boudaries of the nation in which they were originally started. MNCs also can be called as "world enterprise',as International enterprise"or global corporation. 

         The concept of MNCs also can be more understood from the following definitions:------ 

1/. According to International Labour Organisation(ILO), the essential nature of the multinational enterprises lies in the fact that its managerial headquarters are located in one country while the enterprise carries out operations in a member of other countries as well.

2/. According to the united nations commission on multinational corporation,'A multinational cororation is a corporation which operates in addition to the country in which it is incorporated, in one or more other countries.

3/. According to prof. Raymond Vernon; Multinational Compamies attempt to carry out its activities on an international scale.

4/. According to Games C.Baker,  'multinational companies have a direct investment base in several countries, which generally derives from 20% to 50% or more of its profits from foreign operations and whose management makes policy decision based on the alternative available any where in the world.'

So, MNCs follow global business objectives by linking resources and opportunities at global level help international business. A multinational company is poly centric in its orientation. it takes five to eight years to develop a domestic company to MNC stage. The management model will be decentralised and federial structure MNC takes view of national markets, the structure of management caters to regional requirements and decision making will be decentralised. MNC aims at constructing production units in host countries. MNCs control mechanism will be partly at host country and partly from the home country.

Example: There are many MNC companies in India having their subsidiaries. They are famous in their product segment and some have long presence in Indian market.

Some of these companies are ---
1. Nestle    2. Proctor and Gamble    3. Unilever
4. Motorola   5. Sony    6. Britannia Industries  
7. Coca cola   8. pepsi Co.   9. Samsung  
10. Hyundai   11. Jessop & co.   12. Braithwaite and Co.
13. General Electric

MNCs are also known as multinational enterprise (MNEs) But, there is a difference among MNC, Global companies and Trans-national corporations. The global companies need to develop global brand need emphasis on integrating and globalising the marketing processes at a worldwide level. For global companies they are most valuable assist are brands. The global companies have centralised hub model. The global company has global markets and uses resources globally. It will have mixed orientation. On the other hand, Trans-national cprporation is used by United Nations for sake of convenience. It emphasises the trans-national operations, that is accross nation frontiers. To develop a TNC it take around ten years. TNC equity is largely held by the citizens and instituyions of the home country. The senior executives also come home country TNC also contributes other factors like managerial skills,technology along with capital it invests.TNCs startd in second half of 19th century. The grpwth of TNC was rapid during the period 1920 and 1940 and TNC entered least developed countries(LDC) during the period. The special feature of TNC is that it is to see the world as a single economic unit. 


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