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Introduction to Multinational Companies (MNC’s):
The word MNC’s is the short form of Multinational Corporation. As its name, MNC’s is a corporation spreads out one nation to another. Business involve into Multinational Corporation, so that they can capitalize on opportunities. The financial managers must be able to detect opportunities, asset exposure to risk and manage the risk.
Definition of Multinational Companies (MNC’s):
A corporation that has facilities and other assets in at least one country beside its home country is considered as Multinational Corporation. Such companies have offices and/or factories in different countries and usually have a centralized head office where they ...view middle of the document...
After the above discussion we can get the following characteristics of MNC:
1. International business.
2. Multiple nations.
3. Large in size.
4. Centralized Head office.
5. International investing and financing.
6. International financial management.
Some important objectives of MNC:
1. Maximization of shareholders wealth
2. Expansion of financial market
3. Economic development
Some examples:
1. Hitachi Ltd. :
Hitachi Ltd. is a Japanese multinational engineering and electronics conglomerate company headquartered in Chiyoda, Tokyo, Japan. It is the parent of the Hitachi Group and forms part of the DKB Group of companies. Hitachi is a diversified company and has 11 business segments: Information and Telecommunication Systems, Electrical Systems, Social and Industrial Systems, Automotive Systems, Electronic Component Devices, Construction, and Financial services.
2. Unilever :
Unilever is an Anglo–Dutch multinational consumer goods company. Its products include foods, beverages, cleaning agents and personal care products. It is the world's third-largest consumer goods company measured by 2011 revenues (after Procter & Gamble and Nestlé) and the world's largest maker of ice cream. Unilever owns over 400 brands, amongst the largest selling of which are Aviance, Axe/Lynx, Ben & Jerry's, Dove, Flora/Becel, Heartbrand, Hellmann's, Knorr, Lipton, Lux/Radox, Omo/Surf, Rexona/Sure, Sunsilk, Toni & Guy, TRESemmé, VO5 and Wish-Bone. It is a dual-listed company consisting of Unilever N.V., based in Rotterdam, Netherlands, and Unilever PLC, based in London, United Kingdom. Both companies have the same directors and they operate as a single business.
3. LG Corporation :
LG Corporation is a South Korean multinational conglomerate corporation. It is the fourth-largest company of its kind in South Korea. Its headquarters are situated in the LG Twin Towers building in Yeouido-dong, Yeongdeungpo-gu,Seoul. LG makes electronics, chemicals, and telecom products and operates subsidiaries such as LG Electronics, Zenith, LG Display, LG Telecom and LG Chem. in over 80 countries.
4. Nike Inc. :
Nike Inc. is an American multinational corporation that is engaged in the design, development and worldwide marketing and selling of footwear, apparel, equipment, accessories and services. The company is headquartered near Beaverton, Oregon, in the Portland metropolitan area, and is one of only two Fortune 500 companies headquartered in Oregon. It is the world's leading supplier of athletic shoes and apparel and a major manufacturer of sports equipment
In the light of the above discussion, we can say that Multinational Company (MNC) is one that spans multiple nations; these Companies are often very large. Such companies have offices and/or factories in different countries. They usually have a centralized head office where they coordinate global management. Multinationals often make use of subcontractors to produce certain goods for them.
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