Multinational Business

The advantages of a multinational business to host countries are:

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Transfer of technology,capital and entrepreneurship. They increase the investment level and thus the income and employment in the host country. Greater availabilty of products for local consumers. Greater access to high quality managerial talentwhich tens to be scarce in host countries. Increase in exports and decrease in imports,thereby improving the balance of payment of host countries. Help in equalizing of cost of factors of production around the world. They provide an efficient means of integrating economics.

Advantages to home countries

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Acquisition of raw material from abroad,which is cheaper in cost. Technology and management expertise accquired from competing in global markets. Export of components and finished goods for assembly or distribution in foreign markets. Inflow of income from overseas profits,royalities and management contracts. Jobs and career opportunities at home and abroad in connection with overseas opportunities.

What Does Multinational Corporation - MNC Mean? A corporation that has its facilities and other assets in at least one country other than its home country. Such companies have offices and/or factories in different countries and usually have a centralized head office where they co-ordinate global management. Very large multinationals have budgets that exceed those of many small countries. Sometimes referred to as a "transnational corporation".

Investopedia explains Multinational Corporation - MNC Nearly all major multinationals are either American, Japanese or Western European, such as Nike, CocaCola, Wal-Mart, AOL, Toshiba, Honda and BMW. Advocates of multinationals say they create jobs and wealth and improve technology in countries that are in need of such development. On the other hand, critics say multinationals can have undue political influence over governments, can exploit developing nations as well as create job losses in their own home countries.

When a company operating in a home nation establishes its subsidiary in other nations (host nations), it becomes an MNC and there starts the process of globalization wherein a local company serves the entire world with its products and services.

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