WHAT ARE MNCS?MNCs are huge industrial organizations which
extend their industrial and marketing operations through a network
of their branches or their Majority Owned Foreign Affiliates.
MNCs are also know as Transnational Corporation (TNCs).
NEED OF MNC IN UNDERDEVELOPED COUNTRIESSustaining a high level
of Investment.Technological gap.Exploitation of natural
resources.Undertaking the initial risk.Development of basic
economic infrastructure.Foreign exchange gap.
COMPONENTS OF FOREIGN CAPITALForeign exchange takes two main
forms
Private Foreign Investment:-Can either be direct investment or
indirect foreign investment.
Foreign Aid:-Such Aid is that it is made available on
concessional term so that the interest rate is lower and the grace
and maturity period are longer.
ORGANIZATION OF MULTINATIONAL CORPORATIONSMultinational company
can organize its operations in different countries through either
of the following alternatives:
Branches
Subsidaries
Joint Ventures Companies
Franchise Holders
Turn Key Project.
DEFINING SUCCESS FOR MNCS IN INDIA
Capturing the Domestic Market Opportunity
Leveraging Indias resource base to derive additional value for
the corporation R&D / Manufacturing / Sourcing / BPO
REASONS FOR THE GROWTH OF MNCS Expansion of market
territory.
Marketing superiorities.
Financial Superiorities.
Technological Superiorities.
Product Innovations.
ADVANTAGES OF MNCSMNCs have become vehicles of technology to the
developing countriesGreater employment and career opportunities are
provided by these MNCs.MNCs make commendable contribution to
inventions and innovations in the host country.Practice of MNCs
bring to the host country, the latest technique in the field of
management.Varity of goods and services produced for local
customers.
DISADVANTAGES OF MNCSMNCs create monopolies in the market and
eliminate local competitors.MNCs may create depletion of resources
due to its continues use by these overseas companies.MNCs generally
carry out their R&D in their home country and supply to the
host country.MNCs generally import huge raw materials due to its
continuous use by these overseas companies.
