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Understanding Multinational Corporations

The document discusses different types of multinational corporate structures including horizontally integrated, vertically integrated, and diversified corporations. It also describes micro-multinationals enabled by internet tools. Multinational corporations can benefit host countries through job creation, skills training, technology transfer, and cost reduction. However, they also face threats such as nationalization, lack of government assistance, and opposition from local traders. The document outlines advantages of multinational corporations investing in India such as its large market potential, labor competitiveness, and foreign direct investment attractiveness.

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2K views13 pages

Understanding Multinational Corporations

The document discusses different types of multinational corporate structures including horizontally integrated, vertically integrated, and diversified corporations. It also describes micro-multinationals enabled by internet tools. Multinational corporations can benefit host countries through job creation, skills training, technology transfer, and cost reduction. However, they also face threats such as nationalization, lack of government assistance, and opposition from local traders. The document outlines advantages of multinational corporations investing in India such as its large market potential, labor competitiveness, and foreign direct investment attractiveness.

Uploaded by

swinky
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Multi National Companies

(MNC)

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Multinational corporate structure
 Horizontally integrated multinational corporations manage
production establishments located in different countries to produce
the same or similar products. (example: McDonald's)

 Vertically integrated multinational corporations manage


production establishment in certain country/countries to produce
products that serve as input to its production establishments in
other country/countries. (example: Adidas)

 Diversified multinational corporations manage production


establishments located in different countries that are neither
horizontally nor vertically nor straight, nor non-straight integrated.
(example: Microsoft or Siemens A.G.)

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Micro-multinationals
 A new breed enabled by Internet based communication tools.

 Employees, clients and resources located in various countries.

 Use of internet, cheaper telephony and lower traveling costs.

 Internet tools like Google, Yahoo, MSN, Ebay, Skype and Amazon
make it easier for the micro-multinationals to reach potential
customers in other countries.

 Service sector micro-multinationals, like Indigo Design &


Engineering Associates Pvt. Ltd.

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CONTENTS

What is an MNC?

Benefits & Threats to host countries

Threats to MNC

MNC in INDIA & its advantages

India’s Big Dream

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Definition

 A multinational corporation (MNC) is a business


with extensive international operations in more
than one foreign country.

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Benefits to host countries
 MNC’s generate jobs &income

 Training of local workers in new & potentially


transferable skills

 Technology transfer

 Cost reduction

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India’s Big Dream
 Harnessing the global trends by encouraging the MNCs
to engage in product innovation for local consumers
represents a big challenge in India.

 Policy-makers, industry leaders and academic institutes


need to work together to create and disseminate a list of
"dream innovations" that will inspire people.

 The development of Tata Motor's Rs 1 lakh car provides


a powerful example

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International powers of MNC’s
 International - Large MNC’s influence
in international relations

 Tax competition- Tax breaks, pledges


of govt. assistance etc.

 Market withdrawal-Eg. Pharmaceutical


companies

 Lobbying & Patents

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Threats to MNC

 Nationalization

 Lack of Govt. assistance

 Opposition by local traders.

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MNC In India
 MNC in India are attracted to:

 India’s large market potential

 Labor competiveness

 FDI attractiveness

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MNC In India
 MNC in India represent a diversified portfolio of companies representing
different nations.

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Advantages of MNC in India

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THANK YOU

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