Name : Patel PARTH

Roll no : 20
Class : Ty b.com
Subject : IRM

Topic: “Multinational Corporations”

 Definition
• A multinational corporation (MNC) or multinational enterprise is an
organization that owns or controls production of goods or services in
one or more countries other than their home country. It can also be
referred as an international corporation.
• A multinational corporation is usually a large corporation which
produces or sells goods or services in various countries.
 Role of Multinational Corporations in the Indian Economy

1. Promotion of Foreign Investment

2. Non-Debt Creating Capital inflows

3. Technology Transfer

4. Promotion of Exports

5. Investment in Infrastructure
 Characteristics of Multinational Company
1. Large scale operation

2. Advanced Technology

3. International operations

4. Efficient management

5. Ownership and control

6. Productive organization

7. Monopolistic market
 The main features of MNCs
• "Location - MNCs have their headquarters in home countries and
have their operational division spread across foreign countries to
minimize the cost.
• "Capital Assets - Major portion of the capital assets of the parent
company's owned by the citizens of the company's home country.
"Board of Directors - Majority of the members of the Board of
Directors are citizens of the home country.
• MNCs are large-sized corporation and exercise a great degree of
economic dominance.
 Advantages of MNC's for the host country
1.The investment level, employment level, and income level of the host country increases
due to the operation of MNC’s.
2. The industries of host country get latest technology from foreign countries through MNC’s.
3. The host country's business also gets management expertise from MNC’s.
4. The domestic traders and market intermediaries of the host country gets increased
business from the operation of MNC’s.
5. MNC's break protectionism, curb local monopolies, create competition among domestic
companies and thus enhance their competitiveness.
6. Domestic industries can make use of R and D outcomes of MNC’s.
7. The host country can reduce imports and increase exports due to goods produced by
MNC's in the host country. This helps to improve balance of payment.
8. Level of industrial and economic development increases due to the growth of MNC's in
the host country.
 Advantages of MNC's for the home country
1. MNC's create opportunities for marketing the products produced in
the home country throughout the world.
2. They create employment opportunities to the people of home
country both at home and abroad.
3. It gives a boost to the industrial activities of home country.
4. MNC's help to maintain favorable balance of payment of the home
country in the long run.
5. Home country can also get the benefit of foreign culture
brought by MNC's.
Thank you !!!