Business
Multinational Company
A multinational company is a corporation that operates in multiple countries, with a centralized management system. These companies often have a global presence and conduct business activities in various locations around the world. They typically adapt their strategies to suit the specific needs and regulations of each country in which they operate.
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10 Key excerpts on "Multinational Company"
eBook - PDF- Wesley B. Truitt(Author)
- 2006(Publication Date)
- Greenwood(Publisher)
28 Other MNCs, such as General Electric, have major businesses in several unrelated industries: such as power systems, plastics, medical equipment, entertainment, and financial services. MNCs compete both locally and globally. MNCs can consist of a network of loosely organized national companies, competing locally against others in a single country setting. They can also behave like global companies pursuing centrally directed strategies that take advantage of their global power and resources to compete successfully in domestic markets in which they have operations. 29 There is no universally agreed-upon definition of MNCs. Various scholars have offered suggestions, but none seems to have been fully accepted. Part of the problem stems from the complex nature of global activities: there are international companies, global companies, global industries, transnational companies in global industries, and multinational companies. The critical dis- tinction is whether the company is more than just an importer/exporter into and out of a single or multiple domestic markets. That would be an inter- national or transnational company, whatever its size. 30 MNCs, on the other hand, must be large enough to have actual business operations that are locally managed in several countries, treating the world as 170 The Corporation a single marketplace, and also have centralized leadership setting company- wide strategy and policies. One precise definition of an MNC is a firm ‘‘that engages in foreign direct investment and owns or controls value-adding activities in more than one country.’’ 31 In addition to owning or controlling assets in various countries, MNCs also buy resources or raw materials in various countries, ship them to other countries for processing, and then ship the finished goods to still other countries to sell them. All this activity is managed from a central headquarters that permits its local managers to align their activities as appropriate to local conditions.
eBook - PDF- Gordon Boyce, Simon Ville(Authors)
- 2017(Publication Date)
- Red Globe Press(Publisher)
International business comes in many forms including exporting, con-tracting the services of a foreign company, and operating as a multinational enterprise . The multinational enterprise is best understood as a business that controls income-generating resources (including production facilities or sales and marketing outlets) in more than one country. Multinational investment takes the form of either a greenfield site where new facilities are established or an acquisition where the multinational secures control of an existing enter-prise. We can also distinguish between a market-oriented and a supply-oriented chapter 10 International Business 289 290 THE DEVELOPMENT OF MODERN BUSINESS investment depending on whether the firm is seeking new markets or sources of supply. The classic multinational expands its activities from its ‘home’ country of origin into ‘host’ recipient nations. It does so either through setting up a foreign ‘branch’ or incorporating a ‘subsidiary’ in the host nation. The free-standing company operates only, or predominantly, in host nations rather than domestically, but is owned by investors at home. However, in recent decades variations on these standard models have become more common, including the joint venture as a separate enterprise operated in a host nation between foreign companies or in cooperation with a local partner. Firms may also operate internationally through strategic alliances (Chapter 9) and collabo-rative agreements with companies from other nations without having invested outside the home nation. The critical feature of the multinational, in whatever form it takes, is man-agerial control , which is exercised through the ownership of voting stock in the foreign operation. In some cases the parent firm is the sole owner of its sub-sidiary or foreign branch but control of an enterprise can be exercised by partial ownership.
eBook - PDFToward a Global Business Confederation
A Blueprint for Globalization
- Subhash C. Jain(Author)
- 2003(Publication Date)
- Praeger(Publisher)
Chapter 1 THE EVOLUTION OF MULTINATIONAL ENTERPRISES The development of companies with interests and activities located out- side their home countries has played a significant role in the early evolu- tion of international business. This development has been particularly noticeable since World War II, although companies doing business across national borders emerged considerably earlier. Beginning in the fifteenth century, a number of chartered trading companies appeared in Europe to establish and encourage trade links between a country and its colonies. For example, the East India Company, the Hudson's Bay Company, and others were created in those years and were later transformed into vast trading entities. But for the most part, these early companies were trading houses. Firms that engaged in foreign production emerged only in the second half of the nineteenth century. At the time of World War I, a number of U.S., British, and continental European companies with overseas manufacturing operations existed. Among them, the British firms were the dominant ones, a fact that reflected the nation's imperial position. The growth of U.S. companies with overseas operations revealed the country's emer- gence as the world's major industrial power. Multinational corporations (MNCs) are a product of capitalism, with its inherent goal of yielding more from less. With managerial skills and entre- preneurship, MNCs strive to produce more goods with less investment of capital, labor, and raw materials. If markets are stable, the productivity gains increase the profit per unit, which gets distributed as return on capi- tal or as low prices for consumers. If the productivity gains continue, at 2 TOWARD A GLOBAL BUSINESS CONFEDERATION some point production output cannot be disposed of within the national borders, making it necessary for MNCs to seek markets overseas.
- Surendra Pratap Singh(Author)
- 2019(Publication Date)
- Society Publishing(Publisher)
Moreover, “enterprise” infers the inventive blend of work and capital by a business visionary, a circumstance that is far expelled from the contemporary truth of the modern company in which methodology is bureaucratized and CEOs are named for authoritative initiative instead of innovative aptitudes. Multinational Enterprises and the Global Economy 4 Figure 1.2: Organizational forms. “Company” was the first term for the bigger firm consolidated inside laws starting toward the start of the Industrial Revolution and, presently, it suggests a lesser level of custom that is fitting to the modern enterprise with its contract and lawful identity in law. It is still, be that as it may, utilized conversely with the partnership. Hence “corporation” is the most precise and in spite of the fact that organization can be utilized synonymously, different terms ought to be kept away from. 1.3. TRANSNATIONAL, MULTINATIONAL, OR GLOBAL The distinction between the utilization of the assignment transnational and global has been connected to a division of discernment. Here it is contended that global is more precise than the regularly utilized transnational or global (Figure 1.3). Introduction to Multinational Enterprises 5 Figure 1.3: Types of enterprises. Multinational infers working in a few nations. It infers nothing about the relationship of the enterprise with the limit or with structures of the global economy. Transnational means working far beyond countries and fringes. However, the MNE infers an extensive piece of its surpluses and operational method of reasoning from the division of the world into various duty, condition, work, and utilization routines through the presence of the nation-state and the social and authentic particularities it has. The term ‘Global’ suggests global activities, yet numerous multinationals just work in a select number of nations and have a central goal of utilizing multinational creation to benefit a solitary national market.
eBook - PDF- Jonathan Michie(Author)
- 2017(Publication Date)
- Edward Elgar Publishing(Publisher)
54 5 Multinationals, corporate diversity and globalisation We enable our clients’ success by constantly seeking suitable solutions to their problems. We will do what is right – not just what is allowed. (Deutsche Bank, Code of Ethics, 2013) 1 Perraton (2011, pp. 71‒72) reports that: Foreign direct investment by multinational corporations has grown faster than trade, let alone income, over the post-war period and sales by foreign affiliates of MNCs are now more than double global exports. MNCs account for a significant minority of private GDP, particularly in manufacturing, and, on some estimates, a majority of world trade (with a quarter or more of world trade being between branches of the same company). As major inter- national borrowers and savers, MNCs have been central to the development of global finance. Although FDI remains a minority of total investment, it is growing and significant. 5.1 The growth of multinationals What might be termed the current literature on multinational cor- porations (as opposed to classical works such as Hilferding’s Finance Capital) began perhaps with John Dunning’s 1973 seminal piece on ‘The determinants of international production’ in which he both explored the origins and growth of the multinational enterprise as an organisational form, and placed this theoretically within the context of an analysis of both international trade in goods, and international trade in factors of production. This represented a major contribution to industrial organisation theory. 2 1 Cited in Caesar (2016). 2 For further analysis of how multinational corporations have affected globalisation and vice versa, see for example Cantwell and Narula (2001), Melitz (2003) and Buckley and Ghauri (2004). MULTINATIONALS, CORPORATE DIVERSITY AND GLOBALISATION 55 The growth in the activities of multinationals has led governments to compete to attract inward investment from them.
eBook - PDFCorporate Strategies for South East Asia After the Crisis
A Comparison of Multinational Firms from Japan and Europe
- J. Legewie, H. Meyer-Ohle, J. Legewie, H. Meyer-Ohle(Authors)
- 2000(Publication Date)
- Palgrave Macmillan(Publisher)
Parti Multinational Companies in Southeast Asia and in the Global Economy 1 The Multinational Corporation: The Managerial Challenges of Globalization and Localization Stephen Young INTRODUCTION The aim of this chapter is to provide an overview of the business environment facing multinational corporations (MNCs) at global, regional and local levels, and to assess their strategic responses, high- lighting changes over time. From this overview, the chapter focuses upon the challenges confronting the MNC at corporate and subsidiary level at the dawn of the new millennium. By taking this holistic approach, the objective is to contribute an understanding of both the global environmental and strategic contexts, within which the res- ponses of Japanese and European firms in Southeast Asia can be better understood and interpreted. In commencing this chapter, however, it is important to recognize the significance of the topics being discussed in this volume. Interna- tional business researchers have been active for around 40 years. During this period there has been enormous growth in international business in all its modalities, but principally in the form of interna- tional production by multinational corporations. By the early 1990s, MNCs' international production had surpassed international trade as the main mechanism for servicing international markets; while trade itself was increasingly conducted within and between MNCs. And the characteristics, behaviour and boundaries of the firm have changed dramatically over time. The upshot is that research has struggled to keep pace with and fully understand the dynamics of international business. In general, moreover, the research emphasis among inter- national business scholars has tended to be on foreign direct investment 3 J. Legewie et al. (eds.), Corporate Strategies for South East Asia after the Crisis © Jochen Legewie and Hendrik Meycr-Ohle 2000
eBook - PDF- Geert Bekaert, Robert Hodrick(Authors)
- 2017(Publication Date)
- Cambridge University Press(Publisher)
83,272 101,624 83,567 149,338 22 Nestlé Switzerland Food & beverages 101,977 124,590 90,607 92,215 324,115 335,000 23 Deutsche Telekom Germany Telecommunications 100,140 156,981 48,996 76,826 90,632 225,243 24 Mitsubishi Japan Wholesale trade 100,095 132,777 17,381 57,739 54,273 71,994 25 Allergan Ireland Pharmaceuticals 99,535 135,841 12,884 15,071 22,860 31,200 Note: The data are compiled from Table 24 of http://unctad.org/en/Pages/DIAE/World%20Investment%20Report/Annex-Tables.aspx. 1.3 Multinational Corporations 13 Today, there is much talk about the globally integrated corporation. As former IBM CEO Samuel Palmisano put it in a 2006 speech, such a firm shapes its strategy, management, and operations as a single global entity. True to form, Mr. Palmisano’s speech took place not at its corporate headquarters in Armonk, New York, but in Bangalore, India, where IBM had more than 50,000 employees. In 2016, IBM employed over 150,000 people in India. The Goals of an MNC The premise of this book is that the appropriate goal of the management of any cor- poration, including an MNC, is to maximize shareholder wealth. This is the tradition in what are called the “Anglo-American” countries, including Australia, Canada, the United Kingdom, and especially the United States. The management of a corpora- tion maximizes shareholder wealth by making investments in projects whose returns are sufficiently large to compensate its shareholders, through dividends and capital gains, for the risk involved in the projects. The Investment Time Horizon The appropriate time horizon for management to con- sider is the long term. When deciding if an investment today maximizes shareholder value, the current value of all its future benefits must be compared to the cost of the investment.
eBook - PDF- Robert M. Grant, Judith J. Jordan, Phil Walsh(Authors)
- 2015(Publication Date)
- Wiley(Publisher)
Among functions, R&D is globally integrated while sales are organized by national units that are differentiated to meet local market characteristics. The transnational firm is a concept and direction of development rather than a distinct organizational archetype. It involves convergence of the different strategy config- urations of MNCs. Thus, companies such as Philips, Unilever, and Siemens have reas- signed roles and responsibilities to achieve greater integration within their traditional “decentralized federations” of national subsidiaries. Japanese global corporations such as Toyota and Matsushita have drastically reduced the roles of their Japanese headquarters. Canadian multinationals such as CAE and Agrium are moving in two directions: reducing the role of their Canadian bases while increasing integration among their different national subsidiaries. MNCs are increasingly locating management control of their global product divisions outside their home countries. When Philips adopted a product division structure, it located responsibility for medical electronics in its U.S. subsidiary and leadership in con- sumer electronics in Japan. Aligning structure, strategy, and national resources may even require shifting the corporate headquarters: HSBC moved from Hong Kong to London, 52 Thomson Corporation (now Thomson Reuters) from Toronto to New York. Tight complex controls and coordination and a shared strategic decision process Heavy flows of technology, finances, people, and materials between interdependent units Figure 9.8 The transnational corporation 338 FOUNDATIONS OF STRATEGY SUMMARY Moving from a national to an international business environment represents a quantum leap in complexity. In an international environment, a firm’s potential for competitive advantage is determined not just by its own resources and capabilities but also by the conditions of the national environment in which it operates.
eBook - PDFThe World as a Company Town
Multinational Corporations and Social Change
- Elizabeth Idris-Soven, Mary K. Vaughan, Elizabeth Idris-Soven, Mary K. Vaughan(Authors)
- 2011(Publication Date)
- De Gruyter Mouton(Publisher)
The Multinational Corporation as a Stage in the Development of Capitalism DELTEC RESEARCH PROJECT INTRODUCTION The multinational corporation (MNC) is a qualitatively new structural phenomenon in world capitalism. Industrialized Western countries, including the United States, are themselves subject to the forces of disequilibrium that the MNC can cause in the Third World, such as technological displacement, inflation, currency fluctuations, trade deficits, and capital outflows that lead to such well-known phenomena as rising unemployment, increasing prices, currency devaluations, and fall-ing real wages. Neither can MNC's be thought of as one nation-state's economy in competition with another's. In the 1960's J.J. Servan-Schreiber (1968) saw MNC's as a means of U.S. takeover of the European economy. In the 1970's there is a growing trend of U.S. economic thought that views MNC's as enabling Europe and Japan to out-compete the United States. However, both these perspectives miss the point that MNC's are inde-pendent of any single nation-state. The very nature of their global organ-ization and strategy causes them to have no allegiance to any country. MNC's should not be simply viewed as super-monopolies. Although it is true that MNC's may have monopoly control of markets and production with a concurrent reduction in competition, they also have global control over the direction of scientific research, the technological applications of that research, and the diffusion of knowledge. The impact of this control over scientific research and the diffusion of knowledge on social institu-The members of the Deltec Research Project are Ahamed Idris-Soven, Anne Lonigro, Colleen Reeks, Terence Turner, and several who must remain anonymous. They would like to give special thanks to the North American Congress on Latin America for its help in collecting primary sources.
eBook - PDFMarkets, Organizations and Information
Beyond the Dichotomies of Industrial Organization
- Wilson B. Brown(Author)
- 2013(Publication Date)
- Butterworth-Heinemann(Publisher)
Chapter Twelve THE MULTI-NATIONAL FIRM ORIGINS OF THE MULTINATIONAL FIRM The phrase multinational firm came into widespread use in the 1960s. It usually referred to large firms with operating units in several countries. Managerial writers were enthusiastic about the way single firms could organize production internationally, achieving results that no national firm could. Political writers worried lest this phenomenon, seemingly so new and so large, bring evils in its wake: the concentration of power, international monopoly, or a spreading of low wages. Debate became polarized quite early in the discussions. Writers on the left still use multinational firm as a code word for some form of capitalism gone beyond the constraints or control of any government. Much of the 1970s literature on the MNF stressed its recent origin — as basically a post-Second World War phenomenon — as if it were some-thing policy makers and economists had not faced before and was thus some totally new ingredient in the post-war setting. The idea that something new had arrived lent credence to both the claims of unprece-dented benefits and worrisome threats. While claims of discovering something new are exciting (or inciting, at least to some), the only thing 1 This chapter is a non-identical twin to Chapter 21 of Brown and Hogendorn, International Economics: Context and Theory. That chapter attempts to cover all of neo-institutional thought in a few pages and covers many other aspects of multinational firms; this one probes more deeply the institutional questions. (Three of the firms in the case studies are multinationals: Massey-Ferguson, United Fruit, and Northern Telecom.) 155 156 MARKETS, ORGANIZATIONS AND INFORMATION new about MNFs was the phrase. It is true that MNFs at the turn of the century were small by modern standards, and that their production was less integrated than today's, but then, all economic activity was on a smaller scale and all trade was less integrated.
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