MNC Full Form

Modern technology and outlook have brought certain types of corporate organisations into the world. One such crucial organisation is a multinational corporation. These types of corporations are very renowned nowadays. It governs in more than one nation, but such validation cannot be defined as a Multinational corporation. Some people are of the view that an MNC gains up at least a quarter of its revenue from outside its own country. The presence of MNC in a country has both negative and positive viewpoints surrounding their existence. One thinks of the corporation as an entry to various opportunities, while on the other hand, one thinks of this as exploitative. 

Multi-National Corporation  

If we talk about this corporation, it is that type of corporate organisation that works in more than one country, other than its own home country. The power of regulating and monitoring is one of the most significant aspects of these Multinational corporations. An MNC is recognized by various names, namely transnational corporation, multinational enterprise, stateless corporation and transnational enterprise.

Characteristic features of MNC 

Multinational corporations have certain distinct characteristic features. Some of them are mentioned below: 

• International operations

Due to the presence of MNCs in several countries, they have their production and marketing operations working across these nations. 

• Huge Turnover 

Due to the operation of MNCs across the globe, they can collect huge financial assets which results in huge turnover for these corporations. 

• Mergers and Acquisitions

With their powerful control over the host countries, the Corporation keeps expanding themselves with the help of mergers and acquisitions, which further increases their economic power. 

• Advanced Technology

The presence of advanced technology with these corporations helps them in attracting a larger share of the market. Instead of labor-intensive technology, these corporations make use of capital-intensive techniques which help them in building their business at a faster rate. 

• Huge Expenditure on advertisement and publicity

Multinational corporations spend a huge sum of their capital on the advertisement and publicity of their goods and services. This is the main reason why the fashionableness of these corporations is at a decent height. 

Types of MNCs

On the basis of their growth, objectives and configurations, the MNCs are categorised into distinct categories: 

International Division

Those MNCs which separate their international and domestic businesses and control them differently, come under the category of the international division. Thus, this type gives those managers the freedom to control the international markets in their ways and choices with their knowledge about the international market. 

Global Centralised MNC

The headquarters of these MNCs are located in the domestic countries from where all the activities are undertaken. It is from where all the prior approval is taken by the other countries who are in control of the MNCs. This type of multinational corporation handles its undertakings in both the domestic and worldwide market. 

Decentralised Corporation

This type of MNC doesn’t have headquarters in the domestic countries like we have in the global centralised MNC. Instead, the countries here operate the corporations on their levels and each of them has its management structures to control the undertakings. 

Transnational Corporation

Under this category of MNC, there is the existence of the parent-subsidiary relationship. Here, the parent corporation controls and directs all the operations which are to be conducted in the subsidiary companies. 

Multinational Corporations: A blessing to a nation or not

There are contrasting views related to whether the MNCs are beneficial for a country or not. Some think of this as a device of advancement for a nation, while the other thinks of this as an exploitative corporation. 

Advantages of MNCs

If we talk about the benefits that MNCs deliver to a nation, the one that tops the list is the generation of employment by these corporations in the host countries. Secondly, the multinational corporations bring in capital influx in the host nations that helps in their rapid development. Due to the set up of significant industries in the host nation, the exports from the host country increases and becomes superfluous compared to the imports of the country. Thus, the validity of MNCs helps in the improvement of the BOP position of a country. 

Disadvantages of MNCs

There are some impediments to these multinational corporations too that a nation faces with their existence. Firstly, we have the threat to the domestic and infant industries which might get affected with high quality and low-cost services of these multinational corporations. Secondly, MNCs have their attention on the rich sections of the people, which ignores the poor people of the society. As a result, this widens the gap between rich and poor. Thus, MNCs are a threat to the economic growth of a country and are disinterested in the nationwide involvement of the people in the host countries. 

Conclusion 

Even if MNCs hurt the host country, the positive points of these multinational corporations overshadow their negative points. Every company wants to become a multinational corporation so that it can increase its market reach. The main concern is to grab as much profits from the business at minimum cost. There can also be some areas where the firms can enjoy certain tax immunities with the establishment of a multinational corporation. Nonetheless, there are certain risks that these corporations face in the home country. The schedule incorporates legal risks, cultural insensitivities, political instability, crime and fluctuations in the exchange rates.