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MULTINATIONAL CORPORATIONS
ORIGIN
• Multinational business operation is not a new concept. It emerged
from mercantilist philosophy.
• The British East India Company, Hudson’s Bay Corporation, and
Royal Africa Company are examples of multinational companies
(MNCs) of the mercantilist era.
• Th e post–World War II period has, however, witnessed a
changing hand in colonialism, and there emerged a new thrust
for industrial and technological development, as well as the rise of
the United States as the largest industrial power.
MEANING
MNCs are considered as giant firms, which are engaged in productive activities
of a corporate nature, with headquarters located in one definite country and
having business operations in different countries.
DEFINITION
There is no universally accepted definition for the term
“multinational corporation”. However, the following definitions by
Jacques Maisonrouge, President, IMB World Trade Corporation,
describes an MNC as a company that meets five criteria as follows:
• Multinationals are able to make any investment for sales promotion and
advertising, and hence, can easily penetrate more into the market and capture a
major share.
3) Technological Monopoly.
5) Repatriation of Funds.