2.5    Multinational Corporation

.  Multinational Corporation (MNC) Multinational Corporation is a Corporate organization which owns or controls production of goods or services in at least one country other than its home country. Evolution of MNC Like, the East India Company, which came to India as a trading company and then had network throughout the country to become politically dominant, these multinationals first start their activities in extractive industries or control raw materials in the host countries during 1920s and then slowly entered into the manufacturing and service sectors after 1950s. Most of the MNC’s at present belong to the four major exporting countries viz., USA, UK, France, Germany. However, the largest is American. of the largest multinationals are Americans. Growth of MNCs in India A common form of MNC Participation in Indian industry is through entering into cooperation with Indian industrialist. Trends MNC Company - - . . AM - - . . AM Globalization and Trade these firms posses as compared to national companies. . Product innovations: MNCs have research and development engaged in the task of developing new products and superior designs of existing products. Advantages of MNC s . Producing the same quality of goods at lower cost and without transaction cost . MNC reduce prices and increase the Purchasing power of consumers world wide . MNC are able to take advantage of tax variation. . Spurring job growth in the local economies Disadvantages of MNC s . They are a way for the corporations to develop a monopoly (for certain products) . They are also a detrimental effect on the environment. . The introduction of MNC into a host country’s economy may also lead to the downfall of smaller, local business. . MNC breach ethical standards, accusing them of evading ethical laws and leveraging their business agenda with capital.