Professional Documents
Culture Documents
Sapna Module 1
Syllabus
Introduction to MNE Meaning of International Corporations Role & Importance of MNC in International Business Elements of Multinational enterprise strategy Market Entry mode strategies International Strategic alliances Cross Border Integration & coordination Knowledge Management MNEs from Emerging Economies
Meaning
An enterprise operating in several countries but managed from one (home) country. Generally, any company or group that derives a quarter of its revenue from operations outside of its home country is considered a multinational corporation.
3
Definition
Mr. Jacques Maisonrouge, president , IBM world trade corporation describe MNCs: It operates in many countries at different levels of economic development. Its local subsidiaries are managed by nationals. It maintains complete industrial organisation including R&D facilities in several countries. It has a multinational central management. It has multinational stock ownership.
4
HISTORY
Multinational business operation is not a new concept.
The British east India company, Hudsons bay corporation and Royal Africa companies are example of MNCs. The post second world war period has however, witnessed a changing hand in colonialism and there emerged a new thrusts for industrial and technological development as well as rise of the USA as the largest industrial power.
6
HISTORY
corporation in the world and the first company to issue stock It was also arguably the world's first mega corporation possessing quasi-governmental powers, including the ability to wage war, negotiate treaties, coin money , and establish colonies.
The first modern multinational corporation is generally thought to be the East India Company. Many corporations have offices, branches or manufacturing plants in different countries from where their original and main headquarters is located.
7
Features of MNC
1. Big size
Objectives
To expand the business beyond the boundaries of the home country. Minimize cost of production, especially labour cost. Capture lucrative foreign market against international competitors. Avail of competitive advantage internationally.
OBJECTIVES
Achieve greater efficiency by producing in local market and then exporting the products.
Make best use of technological advantages by setting up production facilities abroad. Establish an international corporate image.
10
Economic reforms.
Risk minimize.
Growth urge.
Market potential.
11
13
14
MNCs in India
India is the home of a number of multinational companies since the countrys market was liberalized in 1991. Initially The MNC from United States account 37% of turnover of first 20 firm operated in India Now scenario has changed a lot more enterprises from European union like Britain, France, Netherlands, Italy, Germany, Belgium and Finland have come to India and outsourced their work to this country Example Finnish mobile giant Nokia has their second largest base in India
FDI attractiveness
Labor competitiveness
Strategic Alliances
Mergers & Acquisitions- Mittal steel & Arcelor SA- Mittal- Arcelor Wholly owned subsidiaries Joint ventures- two or more firms join together to become a new entity, that is legally separate & distinct from its parentsFuji Xerox- JV between Xerox & Fuji photo
Main Advantages of International Strategic alliancesa) Cross Border integration b) Knowledge Management
Assignment
End of Module 1