Transcript
MULTINATIONAL CORPORATION
What is a Multinational Corporation (MNC)?
∂ is a corporation or an enterprise that manages production or delivers services in more than one country
∂ also known as international corporation, multinational enterprise (MNE) or transnational corporation (TNC)
Multinational Corporation
∂ …a corporation that has its management headquarters in one country, known as the home country, and operates in several other countries, known as host countries. (International Labour Organization)
2 Main Characteristics of MNCs
∂ Large size
∂ Their world wide activities are centrally controlled by the parent companies
Roles of Multinational Corporation
∂ Filling Savings Gap filling the resource gap between targeted or
desired investment and domestically mobilized savings.
∂ Filling Trade Gap relates to filling the foreign exchange or
trade gap.
Roles of Multinational Corporation (cont.)
∂ Filling Revenue Gap filling the gap between targeted
governmental tax revenues and locally raised taxes
∂ Filling Management/Technological Gap MNCs not only provide financial resources
but they also supply a “package” of needed resources including management experience, entrepreneurial abilities, and technological skills.
Roles of Multinational Corporation (cont.)
∂ Other Beneficial Roles The domestic labor may benefit in the
form of higher wages. The consumers benefit by way of lower
prices and better quality products. Investments by MNCs will also include
more domestic investment. MNCs expenditures on research and
development (R&D), although limited is bound to benefit the host country.
Factors Influencing Organizations
Internal and External Forces
∂ Macro Environmental Factors External factors which are beyond the
control of the organization∂ Micro Environmental Factors
Internal factors that can be controlled to an extent
Factors close to the company that have a direct impact on the organizations strategy
Macro Environmental Factors
SOCIOCULTURAL FACTORS- Population changes- Rising educational levels- Norms and values- Social responsibility
TECHNOLOGICAL FACTORS-Demand-Production processes-Evaluating technological changes
Macro Environmental Factors (cont.)
POLITICAL AND LEGAL FACTORS-Attitudes toward business-Legislation-Levels of government influence
ECONOMIC FACTORS-Balance of payments-Business cycle-Income distribution-Transfer payments-Monetary and fiscal policies
Macro Environmental Factors (cont.)
INTERNATIONAL FACTORS-Economic associations-Intergovernmental relations-Cultural differences
Micro Environmental Factors
CUSTOMERS EMPLOYEES SUPPLIERS SHAREHOLDERS MEDIA COMPETITORS
Thank You very much!
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