MNC’s IN INDIA

AMITH HATTARKI
What are MNC’s?
 MNC’s are huge industrial organizations which
extend their industrial and marketing
operations through a network of their
branches or their Majority Owned Foreign
Affiliates.

 MNC’s are also know as Transnational

Corporation (TNC’s).
Need of MNC in
underdeveloped countries…
 Sustaining a high level of Investment.
 Technological gap.

 Exploitation of natural resources.

 Undertaking the initial risk.

 Development of basic economic infrastructure.

 Foreign exchange gap.

Components of Foreign Capital
 Foreign exchange takes two main forms

ØPrivate Foreign Investment:-

Can either be direct investment or indirect
foreign investment.

ØForeign Aid:-
Such Aid is that it is made available on
concessional term so that the interest rate is
lower and the grace and maturity period are
longer.
Organization of Multinational
Corporations
 Multinational company can organize its operations
in different countries through either of the
following alternatives:

Ø Branches

Ø Subsidaries

Ø Joint Ventures Companies

Ø Franchise Holders

Ø Turn Key Project.

Defining success for MNCs in
India

 Capturing the Domestic Market Opportunity

 Leveraging India’s resource base to derive

additional value for the corporation
R&D / Manufacturing / Sourcing / BPO
Reasons For the Growth of
MNC’s
 Expansion of market territory.

 Marketing superiorities.

 Financial Superiorities.

 Technological Superiorities.

 Product Innovations.
Advantages of MNC’s
 MNC’s have become vehicles of technology to
the developing countries
 Greater employment and career opportunities
are provided by these MNC’s.
 MNC’s make commendable contribution to
inventions and innovations in the host country.
 Practice of MNC’s bring to the host country,
the latest technique in the field of
management.
 Varity of goods and services produced for local
customers.
Disadvantages of MNC’s
 MNC’s create monopolies in the market and
eliminate local competitors.
 MNC’s may create depletion of resources due
to its continues use by these overseas
companies.
 MNC’s generally carry out their R&D in their
home country and supply to the host country.
 MNC’s generally import huge raw materials
due to its continuous use by these overseas
companies.
Examples of MNC in India
 NK YO U
T HA