Multi National Companies

MULTINATIONAL COMPANIES

Muhammad Usman

What is MNC ??

Examples of MNCs

o Royal Dutch Shello China National Petroleum Corporationo Walmarto Totalo Toyotao IBM

History And Evolution of MNCs

o These corporations originated early in the 20th century and expanded after World War II.

o A multinational corporation develop new products in its native country and manufacture them abroad.

o Almost all the earliest and largest multinational firms were either American, Japanese, or West European.

WORLD’S TOP MNCs

Ranks by revenue(2013)

Impact of MNCs

MNCs can have revenue in the billions of dollars. Thus their operations can have a significant impact on the economies of states, whose GDP’s are sometimes smaller than MNC revenues. E.g.

Wal-Mart: revenue larger than the GDP’s of all but 35 states.

Shell & Pakistan

Shell• Total Revenue 2013

 $481.235 billion (2013)

Pakistan• Budget 2014

$245 billion (2014) (nominal)

Social Impacts

MNCs have social impact through Media

Because most of the media is owned by owners of MNCs so they can change the social trends over the world.

Public Figures

Economical Impacts

Multinational corporations play an important role in the world economy through the process of economic globalization; in other words, the increasing economic interdependence of national economies across the world through a rapid increase in cross-border movement of goods, services, technology and capital.

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National and local governments often compete with one another to attract MNC facilities, with the expectation of increased tax revenue, employment, and economic activity. To compete, political entities may offer MNCs incentives such as tax breaks, pledges of governmental assistance or subsidized infrastructure, or lax environmental or labor regulations.

Political Impacts

• Multinational corporations affect local and national policies by causing governments to compete with each other to be attractive to MNCs investment in their country.

• Multinational corporations often hold power over local and national governments through a monopoly on technological and intellectual property. Because of their size, multinationals can also have a significant impact on government policy through the threat of market withdrawal.

Examples

• Certain parts of Mexico illustrate the drawbacks of globalization — farmers in northwestern states sell produce to California while suffering from malnutrition and poor labor conditions.

• Iraq and Afghanistan war.• East India company and Pakistan

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• Walmart is an example of a large multinational corporation that often exerts influence on political processes through lobbying, contributions to campaigns, and threats of market withdrawal.

• India is an example of a country that, economically, has benefitted from globalization — it has seen rapid GDP growth and has a growing middle class with a rising standard of living.

Advantages of MNCs

o Transfer of technology, capital and entrepreneurship.

o Increase in the investment level and thus, the income and employment in the host country.

o Greater availability of products for local consumers.

oIncrease in exports and decrease in imports.

Disadvantages of MNCs

o Trade restrictions imposed at the government-levelo Limited quantities (quotas) of imports.o Effective management of a globally dispersed

organization.o Slow down in the growth of employment in home

countries.o Destroy competition and acquire monopoly.

Conclusion

After all we can say that only power which is ruling over the world is MNCs. And they have every type of impact over the world so they can do any thing anywhere in the world which they want.