In this session, we will discuss the definition of a multinational company and the features of a Multinational company.
Definition of Multinational Company
In this session, we will discuss the definition of a multinational company and its advantages, and disadvantages.
A multinational company, also known as a corporation or translational corporation is a business with branches, offices, or production facilities in more than one country. If, for example, an American company has offices in the UK Mexico, and France, it is a multinational company. (Definition of Multinational company)
Some people say that any firm that derives at least one-quarter of all its business abroad is considered a multinational corporation.
However, If all that foreign business comes purely from exports and the company has no offices, premises, or production facilities abroad, it is not a multinational.
According to the United Nations, the largest 100 multinational companies control about 40% of global trade during the 20th century, nearly all of the world’s largest multinational companies were either western European, American, or Japanese.
Since the turn of the century, new multinationals have emerged in other regions, such as South Korea, Mexico, India, and China. (Definition of Multinational company)
According to the united nation:- Multinational company is an enterprise that owns or controls production or services facilities outside the countries in which they are based.
In the session on the definition of a multinational company, we will also discuss the features of the multinational company.
The features of multinational companies can be indicated by the following points.
- Productive organization
- Management by professionals
- High efficiency
- Ownership and Control
- High turnover and many assists
- Marketing superiority
- Transfer of technology
- World Wide
Productive organization:- This organization produces various types of goods and services. It is supplie in many countries. It uses its own technology patent right.
Management by professionals:- They have suitable managers take care of their business operations, technology, finance expansion, etc. (Definition of Multinational company)
High efficiency:- These organizations operate their business with efficiency. They use advanced technology. they also involve keenly in research works.
Ownership and Control:- Ownership of company remains on both parent and host country. Parent company control, manage and help in the operation of all host countries.
Marketing superiority:- It is a large organization that has an international name and fame. It has a good network worldwide for the distribution of goods.
Transfer of technology:- These multinational companies are establishe with huge capital and advanced technology. It also transfers the technology to the host countries.
World wide:- Multinational companies operate in the whole world. It extends its business worldwide. It establishes many branches in various companies. (Definition of Multinational company).
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