Wednesday, 9 October 2013

WHAT ARE THE FEATURES OF MULTINATIONAL COMPANIES ?

Posted by Nikhil Singh
Features of multinational companies

INTRODUCTION

Multinational is made out of two words “ Multi and national “ . So Multinationals means a company which operates in more than one country or which has access to International markets . Such companies has branches , Factories , Workshops , headquarters in different countries which are operated or are under control of the headquarters  in the home country. Multinational corporations are called by different names such as TRANSNATIONAL CORPORATION , GLOBAL ENTERPRISE OR INTERNATIONAL ENTERPRISE  . Examples of MNC”s are : PEPSI , HYUNDAI , NIKE , REEBOK , LG , SAMSUNG and many more.

FEATURES OF MULTINATIONAL CORPORATIONS ARE :

  • Giant SizeThe assets and sale of Multinational corporations are quite large . These companies operate on large scale as they trade in more than one companies. These companies generate large wealth.Their operations are so huge that sometimes their sales turnover exceeds the GROSS NATIONAL PRODUCT of a developing Countries. By this we can imagine about the powers and calibre of a multinational company. Example of MNC”s are, The physical assets of IBM exceeds 8 billion dollars.
  • International OperationA multinational corporation operates in more than one country . It has branches , factories , offices in several countries. It operates through a network of branches and subsidiaries in host countries. They sell their products in different countries . For eg : Coca Cola , apple etc. 
  • Professional Management A Multinational corporation employs professional experts , specialised people. MNC”S Try to keep their employees updated by imparting them training from time to time. It employs professionals to handle the advance in technology effectively.
  • Centralized Control The branches of Multinational companies spread in different countries are controlled and managed from the headquarters situated in the home country. headquarters in the home country is the is the main branch. All branches operate within the policy framework formed by headquarters.
  • Oligopolistic Powers Oligopoly means power in the hands of few companies only . Due to their giant size , the multinational companies occupy dominating position in the market .They join hands with big business houses and give rise to monopoly. They also take over other firms to acquire huge power and improve market share
  • Sophisticated TechnologyMultinational companies make use of latest and advanced technology to supply world class products . They use capital-intensive technology and innovative techniques of production.
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