The multinational corporation is a business organization whose activities are located in more than two countries and is the organizational form that defines foreign direct investment.
A multinational corporation/company is an organisation doing business in more than one country. 'In other words it is an organisation or enterprise carrying on business in not only the country where it is registered but also in several other countries. It may also be termed as international corporation, global giant and transnational corporation.
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.
Characteristics of Multinational Companies (MNCs)
The distinctive features of multinational companies are as follows.
1. Large Size:
A multinational company is generally big in size. Some of the multinational companies own and control assets worth billions of dollars. Their annual sales turnover is more than the gross national product of many small countries.
2. Worldwide operations:
A multinational corporation carries on business in more than one country. Multinational corporations such as Coco cola has branches in as many as seventy countries around the world.
3. International management:
The management of multinational companies are international in character. It operates on the basis of best possible alternative available any where in the world. Its local subsidiaries are managed generally by the nationals of the host country. For example the management of Hindustan Lever lies with Indians. The parent company Unilever is in The United States of America.
4. Mobility of resources:
The operation of multinational company involves the mobility of capital, technology, entrepreneurship and other factors of production across the territories.
5. Integrated activities:
A multinational company is usually a complete organisation comprising manufacturing, marketing, research and development and other facilities.
6. Several forms:
A multinational company may operate in host countries in several ways i.e., branches, subsidiaries, franchise, joint ventures. Turn key projects.
Multinational companies make investments in different countries with the following aims.
(a) To take tax benefits in host countries;
(b) To exploit the natural resources of the host country;
(c) To take advantage of Government concessions in host country;
(d) To mitigate the impact of regulations in the home country;
(e) To reduce cost of production by making use of cheap labour and low transportation expenses in the host country.
(f) To gain dominance in foreign markets;
(g) To expand activities vertically.
In order to remain the loyalty of consumer, Dell could take action in response to consumer complaints. Dell Inc. moved their contact centre back to the United States. Although the company has ceased offering its technical support for a particular product line from Indian call centres, but the customer support operations in India still had been focused by Dell and they have still attempted to enhance the customer service quality (Corcoran, 2004). According to the Barry French, the Director of Public Affairs of Dell, he stated that, in order to provide the better experience to consumers, we would continue committed to India and we would continuously modify to improve our business. Therefore, planning is a significant part of an outsourcing and this might also be the most difficult part in outsource of call centre. The planning process which if not managed well can lead Dell failure to outsource its call centre like in India. The level of the outsourcing should be adjusted especially when the company do an offshore...
Please join StudyMode to read the full document