PRESENTATION ON MULTINATIONAL COMPANIES

HITESH JASWANI

INTRODUCTION

A multinational corporation (MNC) is a corporation that is registered in more than one country or that has operations in more than one country. It is a large corporation which both produces and sells goods or services in various countries.

INTRODUCTION

MULTINATIONAL COMPANIES

Create Employment Opportunities

Benefit of foreign culture brought by MNC's.

MNC's create opportunities for marketing

MNC's transfer the capital from the home country to various host countries.

As investments in foreign countries is more profitable,

Advantages ToHome Countries

Disadvantages To Home Countries

MULTINATIONAL COMPANIES

The investment level, employment level, and income level of the host country increases due to the operation of MNC's.

latest technology from foreign countries through MNC's

Level of industrial and economic development increases

MNC's may transfer technology which has become outdated in the home country.

MNC's may kill the domestic industry by monopolizing the host country's market.

A large sums of money flows to foreign countries in terms of payments towards profits, dividends and royalty.

Advantages To Host Countries

Disadvantages To

Host Countries

CONFLICTS OF LAWSConflict of laws is a set of procedural rules that

determines which legal system and which jurisdiction's applies to a given dispute.

The three branches of conflict of laws are: Jurisdiction Choice of law Foreign judgments

HOW WE CLASSIFY A COMPANY AS AN MNC`S

Generally to qualify as an MNC, the followings qualities are essential

    Subsidiaries in Foreign Countries

  Operation in number of Countries

  High Proportion of Assets/ Revenue in/ from global operation

  Overseas operation should have manufacturing’s / R&D

Operation

Employees and Stakeholder should be from different Countries

DRAWBACKS OF MNCS Drainage of Resources

Minimum Transfer of Technology Exploitation of Labour

Cultural Loss

Creation of Monopolies Evasion of Taxes

Depletion of Natural Resources

CHALLENGES FACING MULTINATIONAL COMPANIES

1. There is usually acute shortage of manpower - people with lack of managerial and technical skills.

2. The challenge of unfriendly business environment .

3. There may be huge cost of labour in the host country, at least to get the expatriate managers from home country or somewhere else.

IS MNC`S SUPERIOR TO INDIAN COMPANIES ?

I think MNCs are superior to Indian companies because the very first reason would be:

  India is a developing country and the Indian

companies offer less salaries as compared to the MNCs because MNCs are spread worldwide and the turnover is more compared to the Indian.

IMPACT OF MULTINATIONAL COMPANIES ON THE HOST COUNTRY

MNC`s can provide developing countries with critical financial infrastructure for economic and social development.

When a multinational invests in a host country, the scale of the investment (given the size of the firms) is likely to be significant. Indeed governments will often offer incentives to firms in the form of grants, subsidies and tax breaks to attract investment into their countries.

US TAX POLICY TOWARDS MNCS

Operating in many countries, MNCs are subject to multiple tax jurisdictions, i.e., they must pay taxes to several countries.

National tax systems are exceedingly complex and differ between countries.

Differences among national income tax systems affect the decisions of managers of MNCs, regarding the location of subsidiaries, financing, and the transfer prices

TOP MNCS IN INDIA

IBM (India Private Limited)MicrosoftSamsungPepsiCoRanbaxy Laboratories LimitedReebok International LimitedSonyCoca ColaVodafoneTata Motors Limited

CONCLUSION A MNC`s gives many advantages to

domestic companies through purchasing of raw material and resources.

A new company uses MNC`s network to expand their business.

Industrial growth and GDP Effected so, MNC`s become a milestone in developing countries.