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Meaning, definition, Features, Highlights - Multinational Corporation(MNCs) in India | 11th Commerce : Business Ethics and Corporate Governance

Chapter: 11th Commerce : Business Ethics and Corporate Governance

Multinational Corporation(MNCs) in India

MNC is defined to be anenterprise operating in several countries but managed from one country.

Multinational Corporation in India

 

Meaning

Indian economy is growing over the lengths and breaths and establishes businesses earning huge profit. Companies have  grown in their size  (capital  and  number of employees) competing with different countries companies. The concept of Multinational Corporation has gained significance over a period of time as it has its business globally in different countries.

 

Definition

MNC is defined to be anenterprise operating in several countries but managed from one country.

AMultinational corporation is anorganization doing business in more than one country. It engages in various activities like exporting, manufacturing in different countries.

MNC is company which functions with a head quarters based in one country, while other facilities are based in other location.

Any company is referred to as a Multinational company or corporation (MNC) when that company manages its operation or production or service delivery from more than a single country. It has its headquarter based in one country with several other operating branches in different other countries. The country where the head quarter is located is called the home country whereas; the other countries with operational branches are called the host countries. Apart from playing an important role in globalization and international relations, these multinational companies even have notable influence in a country’s economy as well as the world economy. The budget of some of the MNCs are so high that at times they even exceed the GDP (Gross Domestic Product) of a nation.

 

Features of MNCs

The main features or elements of MNCs are as follows

1.        Considers opportunities throughout the globe though they do the business in a few countries.

2.        To invest considerable portion of their assets internationally.

3.        They are huge industrial/business organisation.

4.        It engages in international production and operates plants in a number of countries.

5.        They take managerial decisions on a global perspective.

6.        They produce in one or a few countries and sell them in most of the countries.

7.        Their international operations are integrated into the corporations overall business.

 

Why MNC’s in India

The reasons for so many MNC’s in Indian are as follows

1.        India has a huge market

2.        It is one of the fastest growing economies in the world.

3.        Favorable policies of the government towards FDI.

4.        Financial liberalization of the country after 1991.

5.        Government encourages and makes continuous efforts to attract foreign investment by relaxing policies.

 

Highlights (2015)

India ranks 10th in the world in factory output

The manufacturing sector accounts for 27.6% GDP

Privatisation of certain public sector industries

Liberlisation also attracted MNC’s and encouraged local entrepreneurs

Indian stands 15th in services output

Increased demand from foreign consumers for Indian products and services

India has an extensive network of undersea fibre-optic cables leading to India becoming the centre for outsourcing of business process

India has become big employment generator especially amongst young graduates.

India has witnessed sustained economic development as envisioned byour forefathers

Top MNC’s in India

Following are the names of some of the most famous multinational companies

The entry of MNC’s into India  have proved quite beneficial for the growth and development of Indian economy providing employment opportunities for the young generation.

 

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11th Commerce : Business Ethics and Corporate Governance : Multinational Corporation(MNCs) in India | Meaning, definition, Features, Highlights


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