A corporation that has its facilities and other assets in at least one country other than its home

country. Such companies have offices and/or factories in different countries and usually have a centralized head office where they co-ordinate global management.

There are three types classification they are:-

of

MNC

1. THE ETHNOCENTRIC MNC 2. POLYCENTRIC MNCS 3. REGIOCENTRIC AND GEOCENTRIC MNCs

These are the type of MNCs which have strong orientation towards home country This means that home country people are considered as superior and allocated all key posts.

Companies whose values and interests guide strategic decisions. usually companies that are involved in extractive FDI such as oil/gas companies include in ethnocentric mnc. Ethnocentric organizations manage overseas operations directly primarily to protect the companys competitiveness in the home market.

Communication and information is top down and all strategic decisions are steered from corporate headquarters. Subsidiaries sell products design and manufactured by parent companies with little or no local control.

Simpler structure More tightly controlled More ineffective Management In flexibility Social & political backlash

Just opposite to Ethnocentric polycentric type of MNCs has strong orientation towards host country where few key people are nationals and remaining are from the host country. An MNC that adopts the polycentric innovation model evolving through four successive stages of maturity they are:-

Stage 0: At this stage, the MNC's R&D operations are mostly concentrated in the West. While the MNC operates in emerging markets, their local units are primarily sales and marketing functions. Stage 1: Here the MNC starts shifting some of its R&D work to low-cost countries like India that offer plenty of high-quality scientists and engineers. Stage 2: The MNC recognizes the massive potential of emerging markets and delegates more responsibilities to local units in emerging markets which initiate and manage their own R&D projects to cater to local needs.

Stage 3: The MNC starts networking R&D activities in emerging markets with the rest of their global network in order to crosspollinate ideas for new products and business models across multiple regions. The P&L responsibilities for new product lines gradually shift to emerging markets. Stage 4: At this ultimate stage, the R&D hubs in emerging markets are given a global remit as they now own the P&L responsibilities for the global design and rollout of new products.

HOST COUNTRY ORIENTED

Extensive knowledge of foreign market & workplace More support from host government Committed local manager with high morale Duplication of work Reduced inefficiency Difficult to maintain global objectives because of intense focus on local traditions

These MNCs have their concentration in whole world and they make selection for best employees whether they are from host country or home country it does not matter. When MNCs desire an integration of all of their foreign subsidiaries and the melding of a worldwide corporate culture, they adopt a geocentric management strategy.

The geocentric organization has the most complex organizational structure, requiring the greatest amount of communication and integration across national boundaries.

WORLD ORIENTED

Difficult to achieve. Managers must have both local and global knowledge. Forces understanding of global issues. Balanced local and global objectives. Best people and work approaches used regardless of region.

The liberalization has paved the way for easy entry and growth of MNCs in India. At the same time a number of Indian firms have been becoming multinational One of the important ways by which MNCs can contribute to the development of the host countries is by transfer of technology to them.