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A multinational corporation (MNC), also called a Trans-National Co-operation,( TNC TNC ) or multinational enterprise ( MNE ), is a corporation corporation or an enterprise that manages production or production or delivers services services in in more than one country. It can also be referred to as an internation international al corporation corporation.. Th T he International abour !rgani"ation !rgani"ation (I!) (I!) has defined an #NC as a corporation that has its management head$uarters in one country, %no&n as the home coun ountry, try, and and opera perate tess in seve everal ral othe otherr count ountri ries es,, %no& %no&n n as hos host countries. The 'utch The 'utch ast India Company &as Company &as the first multinational corporation in the &orld and the first company to issue stoc% stoc%.. *+ It &as also lso argu arguab ablly the the &orl &orld ds firs firstt megacorporation megacorporation,, posses possessin sing g $uasi$uasigovern governmen mental tal po&ers po&ers,, includ including ing the abilit ability y to &age &age &ar, &ar, negot negotiat iatee treaties, coin money, and establish colonies. +
The first modern multinational corporation is generally thought to be the ast India Company. + #any corporations have offices, branches or manufacturing plants in different countries from &here their original and main head$uarters is located. /ome multinational corporations are very big, &ith budgets that e0ceed some nations 1'2s. #ultinational corporations can have a po&erful influence in local economies, and even the &orld economy, and play an important role in international relations and globali"ation
3y branching out to other countries, #NCs have several advantages, including access to a &ider mar%et and lo&er labour costs. 3y ma%ing products in certain areas of the &orld (eg the 4), foreign companies do not have to pay import tariffs. 3y going global, companies can e0ploit cheap labour sources around the &orld .
MNCs
help increases the investment level and thereby the income and employment in the host country. The transactional corporations have become vehicles for the transfer technology, especially to the developing country. They also kindle a managerial revolution in the host countries through professional management and the employment of highly sophisticated management techniques. The MNCs enable the host countries to increase their exports and decrease their import requirements. They work to equalie the cost of factors of production around the world. MNCs provide an efficient means of integrating national economies. The enormous resources of the multinational enterprises enable them to have efficient research and development systems. Thus they make a commendable contribution to inventions and innovations. Mncs also simulate domestic enterprise because to support their own operations, the MNCs may encourage and assist domestic suppliers. MNCs help increase competition and break domestic monopolies .
!oor citiens of host countries o
"conomic power enables exploitation of workers, environment
#oreign business can destroy local businesses o i.e., soft drinks, Coke and !epsi versus small local manufacturers o $e have concern when $al%Mart comes to town Market power o &fter firms driven out, can exert market power and increase prices, create barriers to entry $hen facing new regulations, can move 'or threaten to(
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NYSE : GE he General Electric Company , or GE ' (, is an American multinational conglomerate corporation incorporated in the )tate of New *ork. +n --, Forbes ranked /" as the world0s second largest company, based on a formula that compared the total sales, profits, assets, and market value of several multinational companies.The company has 1-2,--- employees around the world.
Formation 3y 45-, Thomas Edison had brought together several of his business interests under one corporation to form "dison /eneral "lectric. &t about the same time, Thomson-ouston Company , under the leadership of Charles A. Co!!in , gained access to a number of key patents through the acquisition of a number of competitors. )ubsequently, /eneral "lectric was formed by the 45 merger of "dison /eneral "lectric of Schenectady , Ne" Yor# and Thomson67ouston Company of $ynn% &assachusetts , and both plants remain in operation under the /" banner to this day. The company was incorporated in New *ork, with the )chenectady plant as headquarters for many years thereafter. +n 458, /eneral "lectric was one of the original '( companies listed on the newly formed )o" *ones +ndustrial A,erage and still remains after 2 years, the only one remaining on the 9ow 'though it has not continuously been in the 9:$ index(.
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The first modern multinational corporation is generally thought to be the ast India Company. + #any corporations have offices, branches or manufacturing plants in different countries from &here their original and main head$uarters is located. /ome multinational corporations are very big, &ith budgets that e0ceed some nations 1'2s. #ultinational corporations can have a po&erful influence in local economies, and even the &orld economy, and play an important role in international relations and globali"ation
3y branching out to other countries, #NCs have several advantages, including access to a &ider mar%et and lo&er labour costs. 3y ma%ing products in certain areas of the &orld (eg the 4), foreign companies do not have to pay import tariffs. 3y going global, companies can e0ploit cheap labour sources around the &orld .
MNCs
help increases the investment level and thereby the income and employment in the host country. The transactional corporations have become vehicles for the transfer technology, especially to the developing country. They also kindle a managerial revolution in the host countries through professional management and the employment of highly sophisticated management techniques. The MNCs enable the host countries to increase their exports and decrease their import requirements. They work to equalie the cost of factors of production around the world. MNCs provide an efficient means of integrating national economies. The enormous resources of the multinational enterprises enable them to have efficient research and development systems. Thus they make a commendable contribution to inventions and innovations. Mncs also simulate domestic enterprise because to support their own operations, the MNCs may encourage and assist domestic suppliers. MNCs help increase competition and break domestic monopolies .
!oor citiens of host countries o
"conomic power enables exploitation of workers, environment
#oreign business can destroy local businesses o i.e., soft drinks, Coke and !epsi versus small local manufacturers o $e have concern when $al%Mart comes to town Market power o &fter firms driven out, can exert market power and increase prices, create barriers to entry $hen facing new regulations, can move 'or threaten to(
T
NYSE : GE he General Electric Company , or GE ' (, is an American multinational conglomerate corporation incorporated in the )tate of New *ork. +n --, Forbes ranked /" as the world0s second largest company, based on a formula that compared the total sales, profits, assets, and market value of several multinational companies.The company has 1-2,--- employees around the world.
Formation 3y 45-, Thomas Edison had brought together several of his business interests under one corporation to form "dison /eneral "lectric. &t about the same time, Thomson-ouston Company , under the leadership of Charles A. Co!!in , gained access to a number of key patents through the acquisition of a number of competitors. )ubsequently, /eneral "lectric was formed by the 45 merger of "dison /eneral "lectric of Schenectady , Ne" Yor# and Thomson67ouston Company of $ynn% &assachusetts , and both plants remain in operation under the /" banner to this day. The company was incorporated in New *ork, with the )chenectady plant as headquarters for many years thereafter. +n 458, /eneral "lectric was one of the original '( companies listed on the newly formed )o" *ones +ndustrial A,erage and still remains after 2 years, the only one remaining on the 9ow 'though it has not continuously been in the 9:$ index(.
www&ama(on&com
Friends
(13)
