Multinational Corporations in Pk | Pepsi | Unilever

International Business

Submitted by:-

Group (8) MBA (B2)
Ahmad Nadeem Shahid 06 Shumaila Asnath 48 Sadaf Jabeen 43 Yusra Younas 50

Asad Ali Khan 11
Submitted To:MAZHER JAVED (Lecturer)

Multinational Corporation
Multinational Corporation (MNC) is a corporation or enterprise that manages production or delivers services in more than one country. The first modern MNC is generally thought to be the Dutch East India Company, established in 1602. Very large multinationals have budgets that exceed some national GDPs. Multinational corporations can have a powerful influence in local economies as well as the world economy. Multinational corporations play an important role in international relations and globalization. In Pakistan there are 165 companies out of which there are 47 multinational companies

Total MNCs working in Pakistan

AAB Chartered

• • • • • • • • • • • • • • • • • • • • • • • • • • •

Unilever Proctor & Gamble Nestle Chartered Bank Siemens KFC Toyota Pepsi Cola International Mobilink ICI Citigroup Coca cola Gillette Honda Nestle Shell Sony Toyota Toshiba Samsung HSBC LG Nissan Orascom Philips Mc Donald Microsoft

• • • • • • • • • • • • • • • • • • • • •

Mother care Al-Falah Bank Royal Bank Of Scotland Standard Charter Bank Pak al Saudi Bank Crescent Commercial Bank Hinopak Motors Suzuki Nissan Murree Brewery Colgate-Palmolive Pakistan Pizza Hut Novartis Aventis Warid Telecom Telenor Wateen Telecom China Mobile Mod GAP Reebok


• • • • • • Toyota Honda BMW Nissan Hinopak Motors SUZUKI

• • • • • • • Philips Hawaii Samsung LG Sony Toshiba Intel

• Citibank

• • • • • • •

HSBC Al-Falah Bank Royal Bank Of Scotland Standard Charter Bank Pak al Saudi Bank Crescent Commercial Bank Dubai Islamic Bank

Telecommunication and IT
• • • • • Mobilink Warid Telecom Telenor Wateen Telecom China Mobile

Food and personal care products
• • • • • • • • •

Murree Brewery Procter & Gamble Unilever Pakistan McDonald Pizza Hut KFC Pepsi Coca-Cola Nestle Pakistan

• •

Colgate-Palmolive Pakistan ICI Pakistan

• Siemens

• • Novartis Aventis

• • • Mod GAP Reebok

Top Ten MNCs in Pakistan

1. 2. 3. 4. 5. 6. 7. 8. 9.

Unilever Proctor & Gamble Nestle Chartered Bank Siemens KFC Toyota Pepsi Cola International Mobilink


Unilever Pakistan LTD

The modern Unilever was established in 1929 as an association between the British manufacturer Lever Bros. and several other European soap and margarine manufacturers. Today most Unilever sales are in household products, including soaps and detergents, margarines, cooking fats, dairy products, toiletries, and packaged and processed foods. The group also produces paper and plastic products, industrial chemicals, and animal feeds.

Unilever in Pakistan

The Unilever Pakistan Limited (UPL), formerly Lever Brothers Pakistan Limited was established in Pakistan in 1958. The town of Rahimyar Khan was the site chosen for setting up a vegetable oil factory. Unilever Pakistan is the largest FMCG company in Pakistan, as well as one of the largest multinationals operating in the country. Now operating six factories at different locations around the country. The Unilever's Head Office was shifted to Karachi from the Rahimyar Khan site in the mid 60's.

Unilever Brands in Pakistan
• • • • • • • • • • •

Blue Band Supreme Tea Clear Shampoo Close Up Comfort Fair & Lovely Lifebuoy soap & shampoo Lipton Lux Ponds Rexona

• • • •

Sunsilk Surf Excel Wall’s Wheel

Operations of Unilever:

160 million times a day, someone somewhere chooses a Unilever product. From feeding your family to keeping your Since the time Unilever Pakistan began its operations in 1948, the Company has been closely connected to the Pakistani people and its brands have been an integral feature in their daily lives. In fact, the nature of our business enables our brands to be the pulse and heartbeat of the 164 million people in Pakistan. This is a huge commitment, which makes us responsible and accountable to all our stakeholders and society as a whole and strengthens our resolve to: Make a positive difference to the lives of low income consumers Create new opportunities for growth Improve the overall quality of life in Pakistan, by promoting education, nutrition, health and hygiene. home clean and fresh, our brands are part of everyday life. • • • • • • • Food brands Home care brands Personal care brands Nutrition Health, hygiene & beauty Our advertising Unilever Food solutions

Unilever Pakistan (70.4% Unilever equity) is the largest FMCG Company in Pakistan, as well as one of the largest multinationals operating in the country

Procter & Gamble Overview William Procter, a candle maker, and James Gamble, a soap maker, formed distinct companies. The two men, immigrants from England and Ireland respectively who had settled earlier in Cincinnati, might never have met, had they not married sisters, Olivia and Elizabeth Norris. Since both their industries used similar resources, the Panic of 1837 caused intense competition between the two and as a result it led to discord with the family. Alexander Norris, their father-in law decided to call a meeting where he convinced his new sons-in-law to become business partners. On October 31, 1837, as a result of the suggestion, a new enterprise was born. Procter & Gamble. Procter & Gamble headquarters in Cincinnati, Ohio.

History in Pakistan
Procter & Gamble Pakistan, headquartered in Karachi, commenced operations in Pakistan in 1991. Our goal was to become the finest global consumer goods company operating locally in Pakistan. To fulfill this goal, we are serving Pakistani consumers with 12 high-quality brands locally that strive to make everyday lives better.


P&G Pakistan headquarters are consistently upgraded to the company's progressive values. Investments of $1 million and a recent $600,000 investment have taken place in the work-space environment to date. The P&G Pakistan head office today hosts high-speed digital networks and advanced systems and facilities.

As a company with vast global experience, P&G always has believed in the potential Pakistan has as a country. Since 1989, the total amount invested by P&G Pakistan in assets, working capital and market development has exceeded Rs 6 billion. In addition, Procter & Gamble contributed Rs 3.1 billion to the national exchequer in the form of taxes and duties during 2005 and 2006, increasing 13 percent over the previous year.

P&G has attracted outstanding individuals since the day it began operations in Pakistan. The company employs more than 257 people and creates more than 4,000 jobs indirectly in Pakistan, 99 percent of which are held by Pakistanis. All this makes P&G a more locally focused company.
• • • • • • • • •

Beauty Care Beauty segment Grooming segment Household Care Baby Care and Family Care segment Fabric Care and Home Care segment Health & Well-Being Health Care Snacks, Coffee and Pet Care

Procter & Gamble brands.
• • •

Ariel Actonel. Bounty

• • • • • • • • • • • • • • • • • • • • • • •

Braun Crest Dawn. Downy/Lenor Duracell Gain. Gillette Head & Shoulders High Endurance Ivory Nice 'n Easy Olay. Oral-B. Pampers Pantene Prilosec OTC Pringles. Puffs Secret Tide Vicks Whisper pany.

Nestle Pakistan LTD


Nestlé with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestlé and is today the world's biggest food and beverage company. The Company's strategy is guided by several fundamental principles. Nestlé's existing products grow through innovation and renovation while maintaining a balance in geographic activities and product lines. The company succeeded in achieving sustainable profitable growth during the year under the view driven by successful marketing and sales strategies and focus on key initiatives. Consumer confidence in the company’s brand has further strengthened and the trade remains confident as ever in doing business with it. Innovation and renovation remained the key to development of new products. Food services business unit is fast developing the required skill and competencies to meet specialized needs of out-of –home customers and hope that the organization structure will be more strengthened in the coming years.This is changed 12% i.e. last year. 22.62% as per share. Over all company market share is 80%. Nestlé share as compared to nurpur, nirala and other are moves around 20 to 30%.Total turnover:- 12.9 Billion Rupees

Nestle Deal in:
• • Baby Foods Breakfast Cereals

• • • • • • • • •

Beverages Bottled Water Chocolate & Confectionery Dairy Products Food Services Ice Cream Prepared Foods Petcare Cosmetics

NESTLE Brands:
• • • • • • • • • • • • • • Infant nutrition Nestlé, Lactogen, Nestogen, Cerelac, Neslac, PowerBar, Pria etc.. Coffee Nescafé Nestlé fruit juices Nestlé Pure Life Nestlé Aquarel etc.. Chocolate confectionery and biscuits Nestlé Crunch

• • • • • • • • • •

Galak/Milkybar Kit Kat Smarties Butterfinger Aero Polo Nido Nespray Carnation La Lechera etc..

Nestle Operations:
Nestlé MilkPak Limited (NML) was incorporated in Pakistan under the Companies Ordinance, 1984 & listed on Karachi and Lahore stock exchanges since 1980. Joint venture between Nestle Switzerland and MilkPak Limited came about in 1988.Nestle always make sure that all of its operations are convenient and easily accessible to its target market. Product handling is responsibility of company. Quality and nutritional value are the essential ingredients in all of its brands. Nestle has two factories in Pakistan for the production of different food items. One in Sheikhupura near Lahore and other in Kabirwala near Multan

Pakistan Mobile Communications Limited, better known as Mobilink GSM, is a telecommunication service provider in Pakistan. Mobilink offers exclusively designed tariff plans that cater to the communication needs of a diverse group of people, from individuals to businessmen to corporate and multinationals. Mobilink started operations in 1994 as the first GSM cellular Mobile service in Pakistan by MOTOROLA Inc.,[citation needed] later it was sold to Orascom, an Egypt-based multi-national company.Mobilink has 31.75 million customers by March 2008. Mobilink's Head office is located in Mobilink House, 1 A Kohistan Road, F-8 Markaz Islamabad. Mobilink has become the market leader both in terms of growth as well as having the largest customer subscriber base in Pakistan - a base of over 31 million and growing. We pride ourselves on being the first cellular service provider to operate on a 100% digital GSM technology in Pakistan that also provides state-of-the-art communication solutions to its customers.

Brands of Mobilink

Indigo (Postpaid) JAZZ (Prepaid) Mobilink PCO

WIMAX (Internet Service Provider)

Operations of Mobilink
Mobilink offer both postpaid (Indigo) and prepaid (JAZZ) solutions to their customers. Both the postpaid (Indigo) and prepaid (JAZZ) brands are the largest brands of their kind in the Pakistan cellular industry. In addition to providing advanced voice communication services that makes the lives of millions that much easy, they also offer a host of value-added-services to their prized customers. At the same time, Mobilink places high importance to its coverage, which is why we cover you in 10,000+ cities and towns nationwide as well as over 130 countries on international roaming service. In other words, they speak your language, everywhere. With a soft launch on 1st July 2008, Mobilink is now the second WIMAX internet service provider in Pakistan. Currently providing services only in Karachi. They started offering DSL broadband through a wholly owned subsidiary, Link.Net

Today, KFC is the world’s largest and most well known chicken restaurant chain, with

more than 10,000 locations worldwide, in 78 countries. KFC and its franchises employ

more than 20,000 people worldwide.KFC serves more than 4.5 billion of chicken annually, to approximately 7 million customers a day, world Born and raised in Henryville, Indiana, Sanders passed through several professions in his lifetime.[5] Sanders first served his fried chicken in 1930 in the midst of the Great Depression at a gas station he owned in North Corbin, Kentucky. The dining area was named "Sanders Court & Café" and was so successful that in 1936 Kentucky Governor Ruby Laffoon granted Sanders the title of honorary Kentucky Colonel in recognition of his contribution to the state's cuisine. The following year Sanders expanded his restaurant to 142 seats, and added a motel he bought across the street

KFC in Pakistan
KFC came to Pakistan in 1996 with the first branch opening in Karachi and later in Lahore. The Franchisee was a Pakistani owned and operated, Dubai-based company the Cupola Group, which owns licenses and its own restaurant throughout Pakistan and the middle-east. South Region including Karachi and Hyderabad (interior Sindh).North Region including Lahore, Rawalpindi and Islamabad (Punjab).They have a total of 44 outlets working in Pakistan. 1 outlet is in Islamabad, 2 in Rawalpindi,21 in Karachi, 11 in Lahore and other in others city of Pakistan like Faisalabad, Hyderabad, Gujranwala, Sialkot, Multan, Peshawar and Jhelum.KFC say that for the last seven years they stand as the market leader in the fast food category and our strength lies in the mass appeal of our products and great service

Chicken Meals Sandwich Meals Family Deals

Operations of KFC

They have a total of 44 outlets working in Pakistan. 1 outlet is in Islamabad, 2 in Rawalpindi,21 in Karachi, 11 in Lahore and other in others city of Pakistan like Faisalabad, Hyderabad, Gujranwala, Sialkot, Multan, Peshawar and Jhelum.KFC say that for the last seven years they stand as the market leader in the fast food category and our strength lies in the mass appeal of our products and great service.




Company’s History

Pepsi Cola International is world renowned soft drinks brand. It is a very well organized multinational company, which operates in almost all over the world. They produce, one of best carbonated drinks in the world. Pepsi is a symbol of hygiene, quality and service, all over the world. Pepsi is producing Cola for more than 100 years, and it has dominated the world market for a long time. Its head office is in New York. Pepsi-Cola is a carbonated beverage that is produced and manufactured by PepsiCo. It is sold in stores, restaurants and from vending machines. The drink was first made in the 1890s by pharmacist Caleb Bradham in New Bern, North Carolina. The brand was trademarked on June 16, 1903. There have been many Pepsi variants produced over the years since 1903, including Diet Pepsi, Crystal Pepsi, Pepsi Twist, Pepsi Max, Pepsi Samba, Pepsi Blue, Pepsi Gold, Pepsi Holiday Spice, Pepsi Jazz, Pepsi X (available in Finland and Brazil),

Pepsi Next (available in Japan and South Korea), Pepsi Raw, Pepsi Retro in Mexico, Pepsi One, Pepsi Ice Cucumber and Pepsi White in Japn

The market in Pakistan is surely dominated by Pepsi. It has proved itself to be the No.1 soft drink in Pakistan. Now a days Pepsi is recognized as Pakistanis National drink. In 1971, first plant of Pepsi was constructed in Multan, and from their after Pepsi is going higher and higher.

Pepsi's greatest rival is Coca Cola. Coca Cola has an international recognized brand. Cokes basic strength is its brand name. But Pepsi with its aggressive marketing planning and quick diversification in creating and promoting new ideas and product packaging, is successfully maintaining is No.1 position in Pakistan. In coming future Pepsi is also planning to enter into the field of fruit drinks. For this it has test marketed its mango juice in Karachi for the first time.

Traditionally there are three categories of beverages all over the world. These are: 1. 2. 3. Cola Lemon and Lime, Diet etc. Flavored.


At the initial stage Pepsi introduced single product i.e. Pepsi Cola in 250 ml (Standard size). Right now Pepsi is producing these three categories: 1. 2. 3. 4. Pepsi Cola Lemon & lime (as Teem & 7up) Mirinda Cream (in Karachi) Mountain Dew(just in)

Siemens is Europe's largest engineering conglomerate and the largest electronics company in the world.Siemens’ international headquarters is located in Berlin and Munich, Germany. The company is a conglomerate of three main business sectors: Industry, Energy and Healthcare with a total of 15 Divisions.

Siemens Pakistan
For 85 years, Siemens has been active in Pakistan, where it holds leading positions in the three application fields: Energy and Environmental Care, Industry & Public Infrastructures and Healthcare. The Siemens IT Solutions and Services Group functions across all three fields. Siemens is the country’s No. 1 supplier of high-voltage grid stations, switchgear products and systems, power distribution and power transformers, and network consultancy. The company has also built a new 220kV Power Transformer factory, and is poised to meet the demand in this sector nationally and in the region. In fiscal 2007 (October 1, 2006 – September 30, 2007), sales to customers in Pakistan amounted to EUR 230 million. New orders totaled EUR 280 million. With a workforce of

1,400 employees, Siemens is one of the most important employers in the country and the largest employer of engineering graduates in the country. Directly and indirectly Siemens provides employment to more than 4000 persons across the country.

Operations in Pakistan:-

Industry Sector
Siemens Pakistan maintained its leadership position in Industry Sector by winning the orders for Electro Mechanical Refurbishment, Underground External Electrification and Street Light System of DHA (Defense Housing Authority) Phase V (Lahore) and order from WAPDA (Water and Power Development Authority) for Electrification of New City - Mangla and flawless completion of Electrical, Mechanical and civil works (Train III) at ENI Pakistan.

Energy Sector
Siemens Pakistan received an order for 500kV Rewat substation located near Islamabad. In addition an order for switchboards was secured from the Ministry of Energy and Water (MEW), Afghanistan which is a big milestone. Work on the first state-of-the-art KESC (Karachi Electric Supply Corporation) Load Dispatch Centre project is being executed and it will be completed in 2009.Siemens Pakistan success in the steam turbines continued with selling of a 47 MW state of the art Steam turbine SST-600 for an IPP (Independent Power Producer) which is

expected to reach its commercial operation by 2010. In April 2008, DHA Cogen Ltd, one of our most prestigious projects in the country, started its commercial operations. This is a desalination plant that will provide 94MW power and 3 million gallons of potable water per day.

Healthcare Sector
Siemens Pakistan continued to establish itself as an innovation and technology trendsetter in Pakistan by obtaining orders from Pakistan Atomic Energy which procured 4 Linear accelerators and two OPEN BORE Virtual Simulation CT scanners along with the latest integrated oncology solution from Siemens to be installed at three of their thirteen Medical centers in Pakistan. Atomic Energy Medical centers are ranked among Pakistan's leading Cancer treatment and Nuclear Medicine centers, where patients are diagnosed and treated at a minimal cost

1:-CommunicationSystems 2:-PowerGeneration 3:-IndustrialAutomationandControl 3:-Lighting 4:-MedicalEquipment 5:-TransportationandAutomotive 6:-WaterTechnologies 7:-BuildingTechnologies 8:-HomeAppliances 9:-Fire Alarms

Overview: ICI is the world’s largest manufacturer of the paints and industrial coatings. ICI paints are headquartered in Berkshire, UK and operate 55 manufacturing sites in 25 countries. In this sector its main strength are in  Decorative paints  Industrial paints  Refinish paints for vehicles.

ICI Pakistan
In 1965, ICI UK acquired a 50% interest in the paints company named as “Fullers Paints Pakistan Ltd” situated at Ferozepur Road, Lahore. Its name was changed to Paintex limited and it was converted into a public limited company in 1973. the capacity of the plant was upgraded and enhanced in 1981 and since then the business has proceeded progressively to consolidate the market share in the major segments of decorative paints. Industrial and automotive paints market.

Operations of ICI
ICI paints business Pakistan has become an undisputed leader in the decorative motor and refinish segments of Pakistan’s paint market. With production of 14milion liters, ICI Pakistan touches the lives of painters, architects, paints retailers and home owners with color throughout the country. ICI’s Dulux, Glidden, Maxilite and paintex brands have become as much a part of painter’s vocabulary as color choice, quality, variety and durability are the criteria for the selection of the paints by the end-users. ICI Paints Pharmaceuticals & Animals Health Agrochemicals And Seeds ICI Polyester Staple Fiber ICI Soda Ash Pure Terephthelic Acid Products: • • • • • • • • • • • • • • • Dulux Weather Shield (Acrylic Based). (Decorative) Dulux water repellent (D) Dulux matt enamel, (D) Dulux Gloss (Industrial) Dulux Pentalite (D) Dulux Pentalite Natural Whites (D) Paintex plus Emulsion. (D) Glidden Higloss (I) Glidden Ultrahide (D) Glidden Ultratex (D) Maxilite (D) Dulux Pearl Glo Matt Finish Enamel (I) Dulux once (D) Dulux Super Gloss Enamel (I) Dulux Aluminum Paint Dual Pack (I)

Dulux Synthetic Clear Varnish

Polyester Fibers
• • • • • • Semi Dull PSF Single Component Dyeing Super White Extra High Tenacity Low Pill Micro fibre


Toyota Motor Corporation (Toyota Jidōsha Kabushiki-gaisha), or Toyota is a Japanese multinational corporation. The company was founded in 1937 by Kiichiro Toyoda as a spin-off from his father's company Toyota Industries to create automobiles. It created, first as a department of Toyota Industries, its first product Type an engine in 1934 and its first passenger car in 1936. It is headquartered in Toyota, Aichi, Japan.

Toyota together with its half owned subsidiary Daihatsu had the top sales for the first quarter of 2007 selling 2.35 million vehicles. Toyota plans to produce 9.4 million vehicles in 2007.


Toyota in Pakistan
The company was incorporated in Pakistan as a public limited company in December 1989 and started commercial production in May 1993. To best serve its customers Toyota Motors has established a network of twenty-seven dealers in Pakistan, fully equipped to meet customer needs in sales, service and spare parts. Toyota vehicles are marketed through dealership network. Karachi Quetta Larkana Lahore

Faisalabad Sargodha Multan Sailkot Rawalpindi Islamabad Peshawar D.I.khan Mardan

Operations in Pakistan

• • • • • • • • • • • • •

The most leading company, The most successful company. The most popular company. Providing the best durability & smooth drive. Toyota’s motto is Delighting customers. Wide range of products which no one can compete. More spacious than others. More dashing & attractive. Economical & provide greater mileage. Greater market share than other companies. Easily availability of spare parts. Best in driving on damage roads. Highly customer’s satisfaction ratio comparatively to others.

Standard Chartered Bank
With global headquarters at London, Standard Chartered is clearly the world's leading emerging markets bank with assets of over $90 billion, employing 30,000 people in over 500 offices in more than 50 countries primarily in the Asia Pacific Region, South Asia, the Middle East, Africa and the Americas. It derives its name after two banks - Standard Bank of British South Africa and the Chartered Bank of India, Australia and China - that merged in 1969. The Chartered Bank was founded in 1853 following the grant of a Royal Charter from Queen Victoria, and opened its first overseas branch ever in Calcutta, as it was then known.

HISTORY IN PAKISTAN Standard Chartered Grindlays Bank is the oldest and largest foreign bank in Pakistan. Standard Chartered Grindlays is one of the few banks in Pakistan that offers a complete range of investment banking services. It enjoys a unique position in the financial sector of Pakistan. The Bank opened its first branch in 1884 in Karachi. Today the Bank operates 15 branches and staff strength of approximately 500. The 15 branch network includes 7 in Karachi, 3 in Lahore, 1 each in Rawalpindi, Islamabad, Peshawar, Quetta and Sialkot.

SERVICES The product range consists of:

• • • • •

Working capital finance Term finance ATM service VISA Trade finance and correspondent banking services along with fund transfer facilities and electronic banking through link products. OPERATIONS

Standard Chartered has been in Pakistan since 1863 and is one of the longest operating foreign banks. There are 6 branches that offer full banking services in corporate, institutional and consumer banking and custody services. Adopting a pro-active approach, it offers a flexible and comprehensive range of financial services, in particular transactional banking products. It has invested in our branches to ensure that our business is supported by high-tech operations using State-of-the-art technology. It has dedicated Customer Service Centers with solution-oriented cash product specialists to provide our customers with cost-effective solutions. Electronic delivery system has been put in place to give customers maximum control of their transactions. Pakistan's currency is the Rupee(SWIFTcode:PKR). In Pakistan, Standard Chartered is the largest foreign bank and the only one with a presence in every province. Customers of the Bank can enjoy access to a wide network of 21 branches and over 120 ATMs across Pakistan. The merger of Grindlays with Standard Chartered Bank create the premier international bank in Pakistan and put us in a position to deliver significant benefits in terms of network, products and customer service Standard Chartered Grindlays Bank is one of the first foreign banks to have introduced 24 hours, 7 days a week ATM service in Karachi back in 1991. ATM cards give round the clock access to a customer's Bank account enabling them to withdraw and deposit cash at their own convenience. The Bank has the largest ATM network amongst the foreign banks with 9 ATMs, four in Karachi, two in Lahore and one each in Islamabad,

Rawalpindi and Peshawar. Standard Chartered Grindlays VISA is a globally accepted credit card welcomed at locations displaying the Visa logo. The Card can be used at over 14 million establishments in 160 countries around the globe and over 10,000 outlets in Pakistan.

Availability of quality goods and services in the host country:
In some cases, production in a host country may be primarily aimed at the export market. However, in other cases, the inward investment might have been made to gain access to the host country market to circumvent trade barriers. In the case of many Japanese car manufacturers the investment made into UK production has enabled them to get a foothold in the EU and to avoid tariff barriers.

Skills, production techniques and improvements in the quality of human capital:
It can be argued that MNCs bring with them new ideas and new techniques that can help to improve the quality of production and help boost the quality of human capital in the host country. Many will not only look to employ local labor but also provide them with training and new skills to help them improve productivity and efficiency.

Tax Revenues:
For the host country, there is a likelihood that the MNC will have to be subject to the tax regime in that country. As a result, many MNCs pay large sums in taxes to the host government. In less developed countries the problem might be that there is a large amount of corruption and bad governance and as a result MNCs might not contribute the tax revenue they could and even if they do it might not find its way through to the government itself.

Improvements in Infrastructure:
In addition to the investment in a country in production or distribution facilities, a company might also invest in additional infrastructure facilities like road, rail, port and communications facilities. This can provide benefits for the whole country.

Employment Effects:
Another beneficial effect of the MNCS is that they bring employment opportunities to the host country that would otherwise not be created. Direct effect arise when a foreign MNC employs a number of host country citizens

Balance of Payment:
A country’s balance of payment keeps the track of both its payments and receipts from the other countries. The balance of payment effect is an important consideration for the

host country. When a MNC establish a foreign subsidiary the capital account of the host country benefits from the initial capital flow

Competition and economic growth:
Efficient functioning of markets depends on adequate level of competition between the producers. When a new enterprise is established, the number of players in the market and consumer’s choice increases. In turn this can increase the level of competition in a national market, thereby driving down the market prices and increasing the economic growth. Increased competition tends to stimulate capital investments by firms in plant and equipment, research and development as the struggle to gain a competitive edge over the rivals.

Learning of skills:
Benefits arise when a local enterprise learns valuable skills from the MNCS by its exposure in the market. A firm can learn about specific superior management techniques, superior products and process techniques

Foreign policy:
The establishment of MNCs helps in creating the relationship with different countries in the world. Thus helps in enhancing the foreign relations

The Costs of Multinationals

The costs can be summarized in the points below - for the most part, the costs are closely linked to the benefits but it will depend on the extent of the benefits that might arise as a result of the activity of the MNC.

De-merit goods:
Some companies might be producing goods that are not beneficial. Examples might include tobacco products and baby milk - mentioned earlier.

Repatriation of profits:
Profits might go back to the headquarters of the MNC rather than staying in the host country - the benefits, therefore, might not be as great.

National sovereignty:
The host governments worry that the establishments of MNCS is accompanied by some loss of economic independence. The concern is that the key decisions that can effect the country’s economy are made by the foreign parent that has no real commitment to the host country and over which the host country has no real control

The source of domination:
The MNCS enjoys the benefit of domination. They politically control the economy of the host country

Infant Industries:
The newly established suffers a lot due the arrival of the multinational companies. The don’t get the enough time to developed and fully establish. Before the flourish the conditions becomes so worst due to MNCs that they wiped out.

Knowledge and Skills Transfer:
The multinational companies usually hire the skilled, trained and professional employees already working in the domestic companies. So the knowledge and skills transfers from these domestic companies to the multinational companies subsidiaries.

Cultural Effects:
Sometimes the multinational companies effect the values, norms and traditions of the host country very badly as they bring with them their own culture and try that the host country’s national adopt these values. Through different marketing strategies they try to sell luxurious products to the people. Some people who don’t have enough money to fulfill their basic needs as a result they adopt different illegal ways for acquiring these products which is very bad for the society.


1. New and sunk companies of Pakistan facing problems due to MNCs. As new companies are struggling for growth and development. While sunken companies are in danger, it is difficult for them to survive. In these conditions if MNCs come in these industries then domestic countries will finished.

2. Due to MNCs society face environmental problems. As they pollute our environment. For example different factories of Multan, Lahore, and Karachi pollute water and air. Telecommunication companies have adjusted their tower in urban areas. Their ultra void is harmful for human health. These things are very harmful for our society.

3. Unethical issues:MNCs are involved in many unethical issues like follows


Illegal products:-

Some products are not good for our society like wine, ham burger and pizza, low quality products. It is unethical to sell these products in Pakistan. ii. Cultural Differences:

Pakistan is Muslim country and Islam has specific values, traditions. these companies are effecting these values with the help of their products and marketing. They are forcing our youngsters to go against our own traditions. iii. Child Labors:

MNCs are hiring Childs labors. As they are cheaply available in Pakistan which is unethical. They are playing with their lives.

4. MNCs are developed organizations in their fields. Domestic industries are facing problems due to MNCs. Domestic industries are producing their product in higher cost so they have to charge high price but due to high competition with they are unable to charge high price and they go to end

5. No doubt consumers are taking benefit from MNCs as they get

• • • at low cost.

Quality New Technology Variety

6. MNCs are very important source of getting foreign exchange which is useful for Pakistan.

7. MNCs are improving our relations with other countries with which they belong. People and Government of other countries are coming closer to Pakistan due to MNCs.

8. MNCs have created lot of jobs in Pakistan. Which very good for our country as due to it poverty decrease and people become prosper.

9. One bad practice of MNCs is repatriation of profit. According to it they sent their profit to their home country while they are using resources if home country which bad practice.

10. MNCs help society with different ways as in Pakistan when earthquake come MNCs help a lot effected people .Many companies are working in Pakistan for poverty reduction, to spread education,Health.Examples are Unilever ,siemens and P&G.

1. MNCs should invest in different sectors of Pakistan especially in those sectors which are weak. As in Pakistan most investment comes in banking but other sectors are completely neglected like power.

2. Government should make strict policies to control environmental problems and unethical issues. And ensure their implementation to MNCs which are working in Pakistan.

3. MNCs should be forced to follow all rules and regulations which they are following in their home country.

4. The quality of their products should be of same standard like other big countries. As if they are making products for Pakistan must have same quality as they are producing for UK.

5. Repatriation of profit should be stopped because they are using resources of host country and this profit should be invested in that country.

6. They should develop, train compensate and provide reasonable salaries to human resources of local employees.

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