Multinationals Corporations

Topics: Multinational corporation, Corporation, Globalization Pages: 11 (3038 words) Published: May 23, 2013
Multinational corporations (MNC’s) also known as International Corporation, transnational corporation, global corporation and many more. Due to the political changes that have occurred during the years, the opportunities for multinationals corporations have increased considerably. As a fact multinationals corporations are growing with rapidity. For example in Mauritius we have KFC, Mac Donald’s, Pizza hut which are all multinationals and have branches throughout the island. According to the United Nations a multinational corporation is "an enterprise which owns or controls production or service facilities outside the country in which it is based". In the words of W H Moreland, "Multinational Corporations or Companies are those enterprises whose management, ownership and controls are spread in more than one foreign country". Thus a multinational company carries on business operations in two or more countries. Its headquarters are located in one country (home country) but its activities are spread over in other countries (host countries). MNC's may engage in various activities like exporting, importing, manufacturing in different countries. It may also lend its patents, licences and managerial services to firms in host countries As the word itself indicated multinationals corporations have more than one dimension and despite knowing this fact no one was able to come up with an exact definition of Multinationals Corporation. Eventually the question that arises is what exactly a multinational corporation is.?

Definitions of multinationals corporations (MNC’S)
As mentioned earlier there is no specific definition for MNC’S. Different definitions are obtained from different sources. Below are some of those definitions and its sources. (1) From an ILO report.

“The essential nature of the multinational enterprises lies in the fact that its managerial headquarters are located in one country while the enterprise carries out operations in a number of other countries as well.” (2) From the business dictionary.

“An enterprise operating in several countries but managed from one (home) country. Generally, any company or group that derives a quarter of its revenue from operations outside of its home country is considered a multinational corporation.” (3) From the Research Machines (2004)

The Research machines have come up with four different definitions of Multinational Corporations. * MNC is a corporation that has its facilities and other assets in at least one country other than its home country, or that, which has offices and/or factories in different countries and usually has a centralized head office where they coordinate global * MNC is a business enterprise with manufacturing, sales, or service subsidiaries in one or more foreign countries, also known as Transitional or International Corporation (TNC or INC). * MNC is a company or enterprise operating in several countries usually defined as one that has 25 percent or more of its output capacity located outside its country of origin. * MNC is a corporation or enterprise that manages production establishment located in at least two countries. (4) From the Encyclopedia of Management (2005).

The Encyclopedia of Management (2005) put multinational companies as businesses concern with operation in more than one country. These operations outside the company's home country may be linked to the parent by merger, operated as subsidiaries or have considerate autonomy. (5) By Drucker (1974)

“The multinational company grew from the emergence of a genuine world market demand transcending national, cultural and ideological boundaries, due to the information explosion.” (6) By Iyayi, Agbonifoh and Ehiametalor (1984)

“Multinational companies are multi-management with several layers of management decision making bases from local to regional to global.” (7) By Hodgetts and Luthans (1997).
“Multinational companies are firms having operations in...
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