(A) Meaning:
(i) Global enterprises or Multinational Corporations are the Corporations which under take business activities in more than one country. Any company having its head office in one country and place of business in other countries is called a Multinational Corporation.
(ii) Multinational Corporation played an important role in the Indian Economy since 1991. They have become a common feature of developing economies in the world. A Multinational Corporation is a corporation which operates, in addition to the country in which it is incorporated, in one or more other countries.
(B) Features of Multinational Corporation:
Following are the features of Multinational Corporation:
(i) Advanced and Sophisticated Technology : Multinational company has large capital and sophisticated technology and infrastructure. As a result it undertakes diversified and multifarious activities including manufacturing, marketing, financial, research and development.
(ii) Legal Existence : MNCs are registered in their home country as per their laws and as such they enjoy separate legal status. It can sue and be sued, enter into contracts and own property in their own name.
(iii) Government: MNCs have to bring about the necessary changes in their functioning based upon the laws prevailing in the countries of their operations. For e.g. advertisement about various products on TV is given in local languages in India and in national language Hindi, to cover maximum target audience. In some cases they have to change the menu to suit local demands for e.g. McDonalds had to change its menu for its business in India.
(iv) Origin: The MNCs have origin in one country and the country to which they belong is called home country. The country in which they operate their business activities is called host country. These companies are registered in their home country and have a place of business in different countries of the world. The head office controls the operations of different branches through a network of internet. They also appoint their representatives in host countries for smooth business operations.
(v) Research & Development: MNCs give lot of importance to research and development activities. They are also fully equipped and have necessary infrastructure. The R&D is undertaken for finding out new product, new system, new technology, new methods of doing business in an economical way.
(vi) International Operations : Multinational Corporation play a significant role in world trade. Nearly 40% of the world is contributed by the multinational companies.
(vii) Target Profit Oriented : Earning profit is the main motive of MNCs. For this purpose they introduce new and novel products, launch new marketing schemes, organize trade fairs and exhibitions, does lots of publicity and adopts professional approach in all its dealings.
(viii) Huge Assets and Turnover : Multinational Corporation have huge financial strength because of huge capital and assets. This enables it to develop its business potential in developing and under developing nations where they can earn handsome profits.
(ix) Mighty Economic Power: Multinational Corporation has a huge capital and assets so they have a mighty economic power. They keep on adding to their economic power through constant mergers and acquisitions of companies in host countries.
(x) Centralized Control: Multinational Corporation is managed by parent company. It manages affairs of the subsidiary company from the respective home country. Multinational corporations are controlled by parent companies and mostly home strategic.
(xi) Area of Operation : MNCs operate in different countries of the world and deal in multiple products on a large scale. They operate in those countries where chance of maximizing profit is more. MNCs of developed nations dominate the global market and they undertake production or marketing activities and so on. For . e.g. Coca Cola, Tata Tea and so on have global presence.
(xii) Professional Management: A MNC employs professionally qualified personnel to handle huge funds, advanced technology and international operations.
