How MNC is different from other companies

How MNC is different from other companies

How MNC is different from other companies

MNC i.e Multinational Corporations is that company that operates in more than one country. First of all, we should know what are Multinational companies? MNC stands for Multinational Companies, they are the holding companies having one fixed office in one country and business activities spread within the country of origin and across other countries, it might be outside their own geographical boundaries. 

One is the home company of the MNC from where its other parts in different countries control its operations. The country where it gets cheap labor, they take workers from there, the country where get cheap raw materials, they take raw materials from there, which greatly benefits the company.

MNCs also have a lot of resources such as financial resources, human resources, and physical resources, professional management is done very well in MNCs with all the employees working in it are well versed in their field, as well as research development work in MNCs which leads to many new innovations and stuff is prepared with technological development. 

MNC is first to start a product in one country, if the product runs very well and starts getting good reviews, then it is also started in other countries, which makes the company highly profitable. Some of the MNC which runs very properly and are well known nowadays  -

1. IBM computer and Pepsi cola from the USA

2. Siemens from Germany

3. Sony and Honda corporation from Japan

4. Philips from Holand

Multinational Corporations

The dynamics of the business environment fostered by the drastic political changes in the erstwhile communist and socialist countries and the economic liberalization across the world have enormously expanded the opportunities for the multinational corporations, also known by such names as an international corporation, transnational corporation, global corporation or firm, company, and enterprise, etc.

How MNC is different from other companies

Multinational companies enjoy several advantages by way of huge earnings due to large-scale production and distribution. So basically we may say MNC means a company that had the right to spread its business on a large global scale as there is no restriction on the national boundary from a corporate sector.

Why one should go for MNC?

1. Economic Development - Now we should be well aware of what economic development is? So whenever the economies grow, is seen both in qualitative and quantitative terms which are termed as economic development. So what all aspects are seen in economic development? It includes the people in the country who become healthier, wealthier, highly educated, have greater access to good quality housing, the standard of living is good. 

The standard of living includes various things like safe drinking water, improve sanitation systems, medical facilities, the spread of primary education to improve the literacy rate. eradication of poverty, balanced transport networks, an increase in employment opportunities, etc. So we may say the quality of living standards is the major indicator of economic development. 

Now all these aspects are going to improve when an MNC is entering into a developing country also. So MNC not just helps the host countries but also the home countries. But it helps more to the host countries because the host country is usually a developing country. Mnc's can supply the required financial, technical, and other required resources to needy countries in exchange for economic gains.

And for developing countries, they generally have good natural resources but they cannot exploit those resources as they require foreign technology to explore all those resources that they have. The investment made by MNC'S helps to increase the rate of production, market expansion, and increase the standard of living of the people in that developing country. 

How MNC is different from other companies

 2. Industrial Growth - MNC'S are dynamic i.e progressive and offer growth opportunities for domestic countries. The professional approach of MNC'S is production and marketing helps to increase the profitability of local industries. A combination of MNC'S and the domestic company is useful to exploit the untapped resources, diversity into various fields and thereby, ensure industrial growth.

3. Marketing Opportunities - MNC'S have access to many markets in different countries. They have the necessary skill and expertise to market products at the international level. MNC'S can undertake the selling of products from one country to another country on a larger scale.


Take an example an Indian company has entered into a joint venture with a foreign company to sell its products in an international market, such type of agreement is beneficial to the host company that means the Indian company because the risk of selling the goods is passed to the MNC'S company and the Indian company can concentrate more in the production. Further, it also helps to use the installed and unused capacity to its optimum level.

4. Technology Gap - So MNC'S are the instruments of transfer of technology to the host country. Technology is necessary to bring down the cost of production, improve the quality of goods and services, and produce goods of uniform quantity on a larger scale. A developing country cannot divert its limited resources to develop a technology of its own. Instead, it can be bought readily by paying a price. This way, the service of MNC'S can be of great help to bridge the gap between developed and developing countries. 

Advantages Of Multinational Companies

1. Generation of Employment - Expansion of industrial and trading activities by multinational companies leads to the creation of employment opportunities and raising the standard of living in host countries. 

2. Investment of Foreign capital - Direct investment of capital by Multinational companies helps underdeveloped countries to speed up their economic development.

3. Growth of Ancillary Units - Suppliers of materials and services and ancillary industries often grow in host countries as a result of the operation of multinational companies. 

4. Increase in exports and inflow of foreign exchange - Goods produced in the host countries are sometimes exported by Multinational companies. Foreign exchange thus earned contributes to the foreign exchange reserves of host countries. 

5. Generation of Employment - Expansion of industrial and trading activities by Multinational companies leads to the creation of employment opportunities and raising the standard of living in host countries. 

Limitations of Multinational Companies

1. Least concern of priorities for host countries - Multinational companies generally invest capital in the most profitable industries and do not take into account the priorities of developing basic industries and services in backward regions of that host country.

2. Adverse effect on domestic enterprise - Due to large scale operation and technological skills, Multinational companies are often able to dominate the market in the host countries and tend to acquire monopoly power. Thus many local enterprises are compelled to close down. 

So once you get a job in any MNC'S go for the next step what else like take a jump in the same organization, take promotions, take increments and take learn something that companies are required so you can enhance your skills and then go to some other companies. At last, your ambition should be like I must be happy with my skills.

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