NAME : RONIT J RAMANI

CLASS :TYBBA
ROLL NO : 57
SUBJECT : IF
TOPIC : MULTINATIONAL
CORPORATIONS
 INTRODUCTION
 A multinational corporation (MNC) is a company that
has business operations in at least one country other
than its home country and generates revenue outside of
its home country.
 The East India Company, established in 1600 was an
early multinational corporation. This British
multinational enterprise participated in international
trade and exploration and operated trading posts in
India. Other examples include the Swedish Africa
Company, founded in 1649, and the Hudson's Bay
Company, founded in 1670.
 HOW MNCs WORK
 A multinational corporation has business activities
occurring in at least two countries. Some may
consider any company with a foreign branch a
multinational corporation. Others may limit the
definition to only those companies that derive at least
a quarter of their revenue outside their home country.
 Developing an international presence can open up
new markets and sales opportunities. Corporations
can establish operations in markets where their
capital can be used efficiently.
 CHARACTERISTICS
 Global business presence
 Business conducted in various languages
 A complicated business model and structure
 Direct investments in foreign countries
 Jobs created in foreign countries
 Seeks improved efficiencies, lower production costs,
larger market share
 Pays taxes in countries in which it operates
 Reports financial information according to International
Financial Reporting Standards (IFRS)
 TYPES OF MULTINATIONAL
CORPORATIONS

1. Decentralized Corporation: Maintains a presence in its

home country and has autonomous offices and other facilities
globally. This type of multinational company can achieve
more and faster because it's decentralized. Each office
manages the local business itself, making its own decisions.
2. Centralized Global Corporation: A central headquarters is
located in the home country. Executive officers and
management oversee the global offices and operations as
well as domestic operations. The offices typically must report
to and obtain approval from headquarters personnel for major
activities
 International Division of a Corporation: Part of the
multinational corporation responsible for all international
operations. This structure facilitates business decision-
making and general activities in local and foreign markets.
However, operating independently can pose problems
when overall corporate consensus and action are required.
4. Transnational Corporation: A parent-subsidiary
structure whereby the parent company oversees the
operations of subsidiaries in foreign countries and the
home country. Subsidiaries can use the parent's assets,
such as research and development data. Subsidiaries may
be different brands. The parent usually maintains a
management role directing the operations of its
subsidiaries, domestic and foreign.
THANK YOU.