Multinational

Corporations
 Outline
Definition
Characteristics
Structures
.Differences between multinational
companies and transnational companies
Advantages
.Challenges
I.Overview of multinational corporations in
Vietnam
II.Corporate Social Responsibility (CSR) of
Starbucks in Vietnam
.Conclusion
Game - Kahoot
I. Definition
“
A multinational corporation is a company
that operates in its home country, as well
as in other countries around the world. It
maintains a central office located in one
country, which coordinates the
management of all other offices such as
administrative branches or factories.
“
A multinational corporation (MNC) or
worldwide enterprise is
a corporate organization which owns or
controls production of goods or services
in at least one country other than its
home country.
 2

II. CHARACTERISTIS
OF MULTINATIONAL
COMPANIES
1. Control and Network of branches
2. Very high assets and turnover
3. Continued growth
4. Sophisticated technology
5. Economic strength
6. Forceful marketing and advertising
 CONTROL AND NETWORK OF BRANCHES

 There is a national strength of large companies as the main body

established subsidiaries or branches in many countries
 It usually has a complete decision-making system and the highest
decision-making centre, each subsidiary or branch has its own
decision-making body, according to their different features and
operations to make decisions, but its decision must be
subordinated to the highest decision-making centre;
VERY HIGH ASSETS AND TURNOVER

The bussiness must be large and must

own a huge amount of assets, both
physical and financial.

MBCs seek markets in worldwide and

rational production layout, professional
fixed-point production, fixed-point sales
product, in order to achieve maximum
profit.
CONTINUED GROWTH

Expand the
Quality human Good quality
scale of
resources products
production
 SOPHISTICATED TECHNOLOGY

In order to do achieve
substantial growth, they need to
make sure use of
capital-intensive technology,
especially in their production
and marketing
ECONOMIC STRENGTH

▸ The multinational has stronger

competitiveness in the world
▸ Many large multinational
companies have varying degrees
of monopoly in some area, due to
economic and technical strength
or production advantages
 FORCEFUL MARKETING AND ADVERTISING

Multinational corporations is
spending a huge amount of
money on marketing and
advertising.
III. Multinational Company
Organizational Structures
• Product Structure
• Geographic Structure
• Functional structure
1 . Product Structure
“
Product Structure

▸ Every product makes its own “department”

and it creates the different branches.
▸ Positive: it concentrates all the necessary
resources on marketing as well as
production
▸ Negative: product structure can be the
unnecessary overconcentration on one
product
2 . Geographic Structure
“
Product Structure

▸ The departments are created based on the

locations/countries/continents
▸ The subsidiaries have high degree of
autonomy.
3 . Functional structure
Product Structure

▸ Functions such as finance, operations, marketing

and human resources determine the structure of
the multinational company
▸ Positive: there is greater specialization within
departments and more standardized processes
across the global network.
▸ Negative: the lack of inter department
communication and networking that contributes to
more rigidity within the organization.
IV. MULTINATIONAL VS
TRANSNATIONAL
COMPANIES
1 . Definition
2 . Operation
3 . Local Response
Definition

A multinational company is usually

a large corporation incorporated in
one country which produces or sells
goods or services in various countries.
Definition

A transnational company differs

from a traditional multinational
corporation in that it does not
identify itself with one national
home.
 Operation

Multinational companies Transnational companies

own a home company and spread out their operations
its subsidiaries. in many countries so they do
not have subsidiaries but
just many companies.
 Local response
Multinational companies'
worldwide activities are
centrally controlled by the
parent companies. There will
be some barriers in decision
making.
Transnational companies
are able to gain more
interest in the local markets
where they maintain their
own systems.
Examples

Nestle employs senior

executives from many
countries and tries to make
decisions from a global
perspective rather than from
one centralized headquarters.
Example

Royal Dutch Shell, whose

headquarters are in The Hague,
Netherlands, but whose registered
office and main executive body
are headquartered in London,
United Kingdom.
 The Coca-Cola
Company is an American
multinational corporation
and its headquarters is a
campus in Atlanta,
Georgia.
Microsoft Corporation is
an American multinational
technology company with
headquarters in Redmond,
Washington.
 Unilever is a British-Dutch
transnational consumer goods
company co-headquartered
in London, United Kingdom,
and Rotterdam, Netherlands.
V. THE ADVANTAGES
OF MULTINATIONAL
ORGANIZ ATIONS
1. Tax incentives and tax
avoidance
2. Optimize capital and labor
3. Access to much larger markets
4. Independent locations mitigate
risk
VI. CHALLENGES
A
Political risks
B. Cultural differences
C. Currency Rates
D. Local markets economic potential
E. Workforce
VII. Overview of multinational
corporations in Vietnam
 Overview of multinational companies in Vietnam

Agreements
which
Vietnam
have been
entered
 Overview of multinational companies in Vietnam

MNCs in
Vietnam
 Overview of multinational companies in Vietnam

1. A favorable geographical position

2. Cheap labor market

Vietnam’s
3. An attractive local market
attraction
4. Political stability

5. Many incentives to attract foreign companies

 Overview of multinational companies in Vietnam

Impact of MNCs
on Vietnam
 Overview of multinational companies in Vietnam

Export Turnover

Local companies: 42.80%

2007
FDI companies: 57.20%
Impact of MNCs
on Vietnam Local companies: 27.40%
2017
FDI companies: 72.60%
VIII. CSR of Starbucks
Corporate social responsibility

is a self-regulating business model that helps

a company be socially accountable — to itself,
its stakeholders, and the public.
CSR of Starbucks

RESPONSIBILITY

Ethical Sourcing Environment

▸ Coffee Sourcing ▸ Recycling
▸ Farmer Support ▸ Energy
▸ Tea Sourcing ▸ Water
▸ Cocoa Sourcing ▸ Green Building
▸ Climate Change
Cocoa Sourcing
CSR of Starbucks in Vietnam
Ethically Sourced Cocoa

Cocoa is contained in some of our

most popular beverages.

What We've Been Doing

What We're Working On

“
Climate Change

Tackling
Climate Change

What We've Been Doing

CSR of Starbucks
in Vietnam
“ May, 29th, 2019
Save waste. Save money.
Get yourself a discount
 ▸ After 3 days of construction, 50
Hanoi partners together with
associating organizations and
local residents, just completed
building a playground for
children and community in K7
K8 Thanh Cong collective
Place your screenshot here
quarters, Hanoi, right before
Children's Day.
▸ This project is a collaboration
among local social enterprise
Think Playgrounds, non-profit
organization HealthBridge
Canada and Starbucks Vietnam.
IX. CONCLUSION
X. GAME - KAHOOT
THANKS FOR YOUR ATTENTION