Meaning and definition of Multinational Company

Multinational Companies: Meaning and Definition;

Multinational companies are corporation which have their home in one country but operate and live in the different country. Due to the tremendous growth o transportation, communication and technology particularly during the last two decades,the world has now become a global village.The distance between has becomes as shorter as ever and the geographical barriers between them have virtually missing.As a result, the mutual dependence among the countries has increased. For example coco cola origins in the united state, but a workers drinks coke ‘made in Nepal’ to ques his thirst.similarly,Netscape coffee is originally produce in Switzerland , but an American family enjoys ‘necafe’ made in ‘USA’ every morning in the Chicago.There are several other example of products which are originally manufacture in one country,and are now being manufacture and consume din the other countries.This has been possibly due to the Multinational companies.

Multinational companies are also sometimes called global or transnational corporations. As their names suggest,they have their roots in their down country,but have branches in many other countries.For example:the Unilever Company has its branch in Britain,but it has its subsidiary in Nepal,India ,and other many counties.thus multinational companies refers to those business organization which have their main operation in a country and subsidence operation in many other countries.

Multinational companies are mega form of business organization.which carries out their production and distribution of goods and services in at least two countries.Their owner ship and management are scattered around the countries wherever they operate.They are incorporate in one countryas parents company of multinational companies can viewed as holding company and the branch companies as its subsideries.

Generally the majority of the shares in subsidiary are held by the parent company and the rest by local people and institution.Similarly,the management and finance are under control of the parent company giving some autonomy to the subsidiaries.Multi national companies are engaged in the mass production and distributiono fthe goods and servi es around the world.IBM corporation, nestle company, ford motor corporation.coco-cola company,etc are the exmple of multinational companies.

Characteristics of Multinational companies:

The following are the characteristics of the multinational companies:

1. Large scale business:

The capital o multinational companies considerably large.its assets and volume of sales are also quite large.The sales turnover of some multinational companies are much more then the annual budget of many developing countries.

2. Productive Organization:

Multinational companies are involved in the production distribution of goods and services at the international companies and level.They produce goods and sales them in one brand name of trademark allover the world.

3.Global operation:

Multinational companies operate globally.the parent company manufacture an sells its products and services through its subsidiaries established in other countries.Hence,they perform their business scale at the global scales.