Mnc and Their Roles

Topics: Investment, Developing country, Multinational corporation Pages: 13 (4545 words) Published: May 5, 2013
1.What is a MNC? Discuss the impact of Foreign Direct Investments in at least two sectors of the Indian economy with examples. The essential nature of the Multinational Enterprise lies in the fact that its managerial headquarters are located in one country (referred to for convenience as the ‘home country’). While the enterprise carries out operations in a number of other countries as well (‘host countries’). It means a corporation that controls production facilities in more than one country such facilities having been acquired through the process of foreign direct investment Multinational activity falls into the category of foreign direct investment (FDI). It entails buying or selling firms abroad, or the establishment of entirely new production facilities abroad. Thus, when we say the German electronics manufacturer Siemens buys an American electronics firm or sets up a new electronics plant in the USA it is engaging in FDI. Impact of FDI in India’s Retail sector

1) Employment opportunity - If many companies comes to India for their business they definitely need labor to perform their task. So they can hire our people in a large way so this give the advantage who still waiting for the job opportunity. 2) Enhance lifestyle - FDI will help to Indian people in order to enhance their lifestyle. There are many renown companies if they come to India it will make a huge impact on the people of India. 3) GDP growth - It will also help in increasing the GDP growth of the India. 4) Quality products - The major advantage of FDI is these companies will sell their standard or quality in cheaper price compare to Indian price. So people of India will definitely go for those products where they can afford to buy.5. Farmers can directly access the market policies that will help him to selling their product. 6. By giving less cost for the products, the small scale industries will affected. IT means it will fully abolished by the way of those offers. 7. If we may think "by this action how will we affected". But true is after FDI gets all field or abolished all small scale industries we must fully depends for those (like WALMART). 8. The main theme is we will push to stage to accept all those things what has given by FDI. The products like delayed vegs, fruits. 9Retailers will affect by this method.

10. And also by this way they got strong base on USA.
11. If we accept for the benefits like infrastructure, lifestyle, good economy. We will ready to face effects of this. The government has recently notified the rules approving Foreign Direct Investment (FDI) in the aviation sector by foreign airlines. These new rules allow foreign airlines to buy up to 49 per cent stake in local Indian carriers through government route, a move which will help distressed airline companies like Kingfisher to receive much needed cash flow. Till now, India had only allowed foreign investors not related to airline business to buy up to 49 per cent stake in domestic airlines. But now with the announcement of this new policy, foreign carriers are allowed to invest.Currently, the airline industry in India is plagued by issues owing to, amongst others, high cost of fuel, the sudden and exorbitant increase in airport fee, complicated legal regime, inconsistent tax structure especially amongst states, and un-coordinated government policy framework. To compound matters further, international airlines themselves are facing financial challenges due to global recession, and thus, capital infusion might not be the topmost item on such international airlines’ agenda at this point in time.

2. “The technologies transferred by the MNC to their production units in the underdeveloped countries are appropriate for the latter’s social and economic development needed”. Do you agree or disagree with this statement. Support your answer with relevant examples.

It is observed thatthe technologytransferredbytheMNCstothe underdeveloped conditions is quite...
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