Corporation and Multinational Company Essay
A multinational corporation (MNC) is a corporation that is registered in more than one country or that has operations in more than one country. In other words, business enterprise with manufacturing, sales, or service subsidiaries in one or more foreign countries, also known as a transnational or international corporation. Multinational companies provide some advantages in itself.
Now, I am going to explain the advantages of these companies. First of all, multinational company have big market available in different countries.They have the necessary skill and expertise to sell their products at international level. Any company can enter into a joint venture with a foreign company to sell its products in the international market. It also mean that multinational companies are able to sell far more than other type of company. Entering new markets are always provide advantage of MNCs.
In addition, they follow the market, determine the trends and also provide product range according to different kind of consumers. In addition, brand value is increased because people can find the same brand, the same products from the same quality.Secondly, multinational companies can carry out a lot of research and development. By mean, the resources and experience of multinational companies in the field of research enable the host country to establish efficient research and development system.
Moreover, this helps host country to produce quality products at least possible cost. On the other hand, these companies ensures optimum utilization of natural and other resources of the home country. Furthermore, multinational companies filed for bankruptcy more difficult.
Because, they are financially strong more than other small companies.They also have chance to dividend their operation activities. For example, in Iran, Unilever does not leave the market until their opponents bankruptcy. Unilever does not interested in losing money in Iran.
Because, it is one of the biggest company in the world and it is not important for them. Other advantages of the multinational corporation is to avoid transportation costs. Logistics costs can be much. If freight fee is high, going foreign country and make it there is more logical. Moreover, multinational corporation does not lose both time and money in the transportation process.Multinational companies are specialized, fast growing and dynamic, so they offer growth opportunities for domestic industries. These companies assist local producers to enter the global markets through their well established international network of production and marketing.
At the same time, multinational companies provide a ready made market to domestic suppliers of raw material or semi-finished products. Also, when multinational company enters in to the domestic market they compete with existing competitors and breaks the monopoly of selected few domestic companies.Other advantages of multinational corporation, labor force, labor cost and raw material are more cheaper in the host coutry. For example, as in some countries only woman and children work. This mean, there are lower wage levels in different countres.
Thus, these companies provide employment to a local market. People can easily find any kind of job opportunities. This is the advantages of the both home coutry and host country. It is provide employment especially for Human Resources Departments.For instance, these company opens management opportunities to the management students of the host country. Finally, multinational corporation can achieve great economies of scale. Multinational company assists developing countries to increase efficiency and productivity through transfer of technology and foreign investment. It helps developing countries by providing the required financial, technical and other resources in exchange for economic gains.
In addition, multinational company helps developing countries in earning foreign exchanges. These companies can supply necessary raw materials, echnology, technicians and foreign exchange to promote exports and reduce imports. In conclusion, multinational corporation has several advantages such as a big market available in different countries, high level of research and development, difficult bankruptcy, low transportation costs, fast growth opportunities for domestic market, low labor and raw material costs and also great economy of scale.
All of these advantages open a new door to multinational corporation more easily. Both home country and also host country has the adverse effects of multinational companies.