Brief Notes on Multinational Corporations

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1. MNCs refer to enterprises which own/control production activities outside their base/ home country.

2. MNCs are usually superior/better than to their more local rivals at creating, collecting and cross-fertilising knowledge.

3. MNCs usually possess:

  1. A larger pool of management talent
  2. A wider range of skills
  3. A better understanding of consumer behaviours/market trends
  4. Technological requirements and competitors more
  5. A greater perspective of overall business environment and emerging dynamic changes

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1. Once a firm extends its business abroad, its international operations assume new perceptions.

Many MNCs are holding a large asset, sometime exceeding their host country’s assets.

2. IBM has operations in 82 nations.

3. It has been estimated that the 500 largest industrial corporations amount for 80% of the worlds direct investment and ownership of foreign affiliates. (See Stopford, 1982)

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[Stopford, J.M. (1982): The World Directory of Multinational Enterprises, London: Macmillan]

4. MNCs can contribute to:

  1. Efficiency
  2. Equity
  3. Participation
  4. Creativity
  5. Stability
  6. Divining

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