Question

Attempt the following.

Features of Multinational Corporation.

Answer 1

Following are the features of Multinational Corporation:

1. Advanced and Sophisticated Technology: Multinational Company has large capital and sophisticated technology and infrastructure. As a result, it undertakes diversified and multifarious activities including manufacturing, marketing, financial, research, and development.
2. Legal Existence: MNCs are registered in their home country as per their laws and as such, they enjoy separate legal statuses. It can sue and be sued, enter into contracts, and own property in their own name.
3. Government: MNCs have to bring about the necessary changes in their functioning based upon the laws prevailing in the countries of their operations. For e.g. advertisement about various products on TV is given in local languages in India and in national language Hindi, to cover the maximum target audience. In some cases, they have to change the menu to suit local demands for e.g. McDonald's had to change its menu for its business in India.
4. Origin: The MNCs have origin in one country and the country to which they belong is called home country. The country in which they operate their business activities is called the host country. These companies are registered in their home country and have a place of business in different countries of the world. The head office controls the Operations of different branches through a network of the internet. They also appoint their representatives in host countries for smooth business operations.
5. Research & Development: MNCs give a lot of importance to research and development activities. They are also fully equipped and have the necessary infrastructure. The R&D is undertaken for finding out new products, new systems, new technology, new methods of doing business in an economical way.
6. International Operations: Multinational corporations play a significant role in world trade. Nearly 40% of the world is contributed by the multinational companies.
7. Target Profit Oriented: Earning profit is the main motive of MNCs. For this purpose, they introduce new and novel products, launch new marketing schemes, organize trade fairs and exhibitions, does lots of publicity, and adopt a professional approach in all its dealings.
8. Huge Assets and Turnover: Multinational corporations have huge financial strength because of huge capital and assets. This enables it to develop its business potential in developing and under-developing nations where they can earn handsome profits.