Emergence and Growth of Mncs

Concept of Mnc
CONCEPT OF MNC
A multinational corporation is an enterprise that carries on business operations in more than one country. It extends its manufacturing and marketing operations through a network of branches and subsidiaries which are known as its foreign affiliates. According to a report of international labour office the essential nature of 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.´

CHARACTERISTICS OF MNC:
  * Large size
  * Worldwide operations
  * Centralized control
  * Sophisticated technology
  * Professional management
  * International market
  * High brand equity

ROLES OF MNC
  1) MNC’s help to increases the investment level & thereby the income & employment in host country.
  2)   The transnational corporations have become vehicles for the transfer technology, especially to developing countries.
  3)   They also initiate a managerial revolution in host countries through professional management and employment of highly sophisticated management techniques.
  4)   The MNCs enable that host countries to increases their exports & decreases their import requirements.
  5) They work to equalize cost of factors of production around the world.
  6) MNC’s provide and efficient means of integrating national economies.
  7) The enormous resources of multinational enterprises enable them to have very efficient research & development systems. Thus, they make a commendable contribution to inventions & innovations.
  8) MNC’s also stimulate domestic enterprise because to support their own operations, the MNC’s may encourage & assist domestic suppliers.
  9) MNC’s help to increase competition & break domestic monopolies.

DEMERITS:-
  * MNC’s may destroy competition & acquire monopoly powers.
  * The transfer pricing enables MNC’s to avoid taxes by...