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Copy Of Mpob

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MULTINATIONAL CORPORATIONS

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GROUP IITEAM MEMBERSVINEETHACINDHYADEEPARENJUSUJINTHOMSON

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multinational corporation-(definition) multinational corporate structure process of evolution multinational corporations hierarchy of MNCs activities factors leading to growth in IB benefits of MNCs code of conduct what MNCs have to do ? conclusion list of MNCs in India

CONTENTS

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MULTINATIONAL CORPORATION

Multinational corporation (or Transnational corporation) (MNC/TNC) : It manages production establishments or delivers services in at least two countries

Definition: It engages in foreign direct investment (FDI) and that owns and controls value added activities in more than one country.

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Large multinationals have budgets that exceed those of entire countries. They have a powerful influence in international relations and local economies.

They have play an important role in globalization ; some argue that a new form of MNC is evolving in response to globalization: the 'globally integrated enterprise'.

MNCs have existed since1602, in which year the first MNC, the Dutch East India Company, was established.

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According to MNCs,it represents a cluster of affiliated firms located in different countries that:

Are linked through common ownership Draw upon a common pool of resources Respond to a common strategy

All this shows high degree of integration among different units of the firm.

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MULTINATIONAL CORPORATE STRUCTURE

Multinational corporations can be divided into three broad groups according to the configuration of their production facilities:

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

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2.Vertically integrated multinational corporations: It manages production establishment in certain country/countries to produce products that serve as input to its production establishments in other country/countries. (example: Adidas)

3.Diversified multinational corporations:

It manages 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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PROCESS OF EVOLUTION 

MNCs did not merge overnight.

Domestic firms after going through various stages of the evolution process, qualify for being called as an MNC.

The process of evolution can broadly be grouped in three successive stages. They are:

TradeAssembly or productionIntegration

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MULTINATIONAL CORPORATIONS

The Multinationality of MNCs increase with

Number of countries in which it has subsidiaries or affiliate firms

Number of countries in which the firm has operations of various sorts

Foreign assets, revenues, employees over total

Proportion of foreign employees, managers, stockholders

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HIERARCHY OF MNC ACTIVITIES

Sales or marketing Office

Simple assembly plants Full-Scale manufacturing (final

products and components manufacturing abroad)

R & D operations

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FACTORS LEADING TO GROWTH IN IB

 The factors leading to the growth in IB are:

Rapid technological advancement Emergence of supportive institutions Openness of economic policies among large

number of countries Increase in competition

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BENEFITS OF MNC

Benefits from MNCs can be studied under two broad heads:-

Benefits to the host Benefits to the home countries

Benefits to the host countries : Transfer of technology, capital and entrepreneurship to

the host country. Improvement of the host country’s balance of payment .

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Creation of local job and career opportunities .

Improved competition in the local economy and better utilisation of available resources .

Greater availability of products for local consumers .

Encouragement to World economic unity

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BENEFITS TO HOME COUNTRIES :-

Acquisition of raw materials from abroad Technology and management expertise

acquired from competing in global markets . Inflow of income from overseas profits . Job and career opportunities at home and

abroad . 

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CODE OF CONDUCTThe multinational corporation shall :-

Respond affirmatively to the social and economic plans of the host country.Seriously consider credible complaints and try to eliminate them .Confirm to the established policies and the laws of the host country .

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Supply appropriate information to local authorities about health, safety and environment effects of company‘s products .

Be concerned about human rights in decision making.

Provide clear statement of the basic mission and policies of the company

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WHAT MNC HAVE TO DO ?

MNCS need to respond in the following ways :-

Provide employment .Train managers .Provide products and services that raise the standard of living .

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Introduce and develop new technical skills .

Introduce new managerial and organisational practices

Raise the GDP .Increase productivity .Helps build up foreign exchange reserves .

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CONCLUSION

To conclude, we would opine that MNC’s having a wide ambit is envitable to us, as to the fact that, there exists lots of job opportunity paves a path for the increase in National Income. And also to create a better society, with better standard of living,and it increases labour productivity ,decrease in unemployment,and also increases the net national income of the country.This will help the government and this will lead to increaseinm the export and imports in the country.

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Type :Public (NYSE: WIT)

Founded :1945 (Pre Independence)

Headquarters :Bangalore

Key people: Azim Premji, Suresh Vaswani, Girish S. Paranjpe

Industry: Information technology services

Revenue: ▲$5.0 billion (2008) USD

Net income:▲$677 million (2007) USD

Employees:100,000+ (2008)

Website :www.wipro.com

WIPRO TECHNOLOGIES

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Type :Private Conglomerate/Listed Companies.

Founded :1900s

Headquarters :Mumbai, India

Key people: Kumar Mangalam Birla (Chairman)

Industry: Metals and several others.

Products:Aluminium, Copper, Cement, Fertilizer, Textile, Fibre, etc.

Revenue:▲ $24 billion

Employees:100,000+

Subsidiaries: Several.

Website: www.adityabirla.com

Aditya Birla Group

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RELIANCE GROUP

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues are in excess of US$ 34 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India.

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RELIANCE GROUP

The Group exports products in excess of US $ 20 billion to 108 countries in the world. Major Group Companies are Reliance Industries Limited (including main subsidiaries Reliance Petroleum Limited and Reliance Retail Limited ) and Reliance Industrial Infrastructure Limited

Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major petrochemical products.

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 Type: Private Conglomerate (BSE)Founded :1868 by Jamshedji TataHeadquarters :Mumbai, Maharashtra, IndiaKey people: Ratan Tata, ChairmanIndustry: Engineering

MaterialsInformation technologyCommunicationAutomotiveChemicalsEnergy

TATA

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Products:SteelAutomobilesTelecommunicationsSoftwareHotelsConsumer goods

Revenue :US$ 62.5 billion[1](Feb 2008)Net income: ▲ US$ 4 billion (FY 2007)Employees:2,89,500 (2007)Website :www.tata.com

TATA

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INFOSYS Infosys Technologies Ltd. (NASDAQ: INFY) was started in 1981 by seven people with US $ 250. Today, we are a global leader in the "next generation" of IT and consulting with revenues of over US$ 4 billion.

Infosys' service offerings span business and technology consulting , application services, systems integration, product engineering, custom software development maintenance, re-engineering, independent testing and validation services, IT infrastructure services and business process outsourcing.

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