Managerial Economics

Multinational Companies (MNCs)

Group Members
O Krishnan R. O Hormaz B. O Kanchan N. O Akshay N. O Sohil S. O Shakir M. O Rohan J.

6009 6019 6029 6039 6049 6059 6069

Contents To Presented
Introduction Characteristics of MNCs Objectives History of MNCs Evolution of MNCs Role of MNCs

Advantages of MNCs
MNCs & INDIA Conclusion

Introduction
O What is Multinational Organisation?
O According to ILO report

(i.e. International labour organisation). O MNCs benefits & costs. O Types of MNCs. O MNCs structure.
O Top 10 MNCs in India

Characteristics of MNCs
O Area of operation
O Origin O Profit motive O Management O Manufacture and marketing activities O Quality consciousness O Their main aim is to obtain the highest

possible profit .

Characteristics of MNCs
O They invest large sums of money . O They operate in more than one country at O O

O
O O

the same time . They invest large sum of money . They have large number of consumers . They have large number of competitors . Worldwide integration . Worldwide market .

Objectives
O To expand the business beyond the boundaries of O O O O O O

the home country. Minimize cost of production, especially labour cost. Capture lucrative foreign market against international competitors. Avail of competitive advantage internationally. Achieve greater efficiency by producing in local market and then exporting the products. Make best use of technological advantages. Establish an international corporate image.

History of MNCs
O FIRST MNCS IN WORLD:

EAST INDIA COMPANY O FIRST MNCS IN INDIA: EAST INDIA COMPANY O FIRST INDIAN MNCS Ranbaxy(Gurgaon, Haryana, India)

Evolution of MNCs
Three Stages of Evolution
O Multinational Stage

O Foreign Production Stage

Licensing DFI versus Licensing Direct Investment

O Export stage

Role of MNCs
O Role by MNCs in countries economy.

O The positive role by MNCs

O The negative role by MNCs

Advantages of MNCs
TO THE HOST COUNTRY: O Transfer of technology, capital and entrepreneurship. O Increase in the investment level and thus, the income and employment in the host Country. O Greater availability of products for local consumers. O Increase in exports and decrease in imports.

Advantages of MNCs
TO THE HOME COUNTRY: O Acquisition of raw materials from abroad. O Technology and management expertise acquired from competing in global markets. O Export of components and finished goods for assembly or distribution in foreign markets. O Inflow of income from overseas profits, royalties and management contracts.

MNCs & INDIA

Why MNCs in India MNCs in India are attracted towards: Profit of MNCs in India What is the future of MNCs in India? China may overtake India in MNC R&D investment: study O Why Indian youth prefer MNCs than domestic companies O MNCs focus on senior Indian professionals for top global roles O Multinationals and Indiaa plan for progress
O O O O O

Conclusion
O They serve the customers and the

institution best O MNCS create more employment opportunities O Better standard of living , and it increases labour productivity O Gives advantages to Domestic Companies through purchasing of raw material &resources from them.