MNCâ€™s have their headquarters in the parent or home country and subsidiaries, factories, industries in other nations. These businesses are referred to as global enterprises since they operate on a global scale. The parent organization oversees and manages the activities on a global scale. MNCs’ products and services are sold in a variety of nations, necessitating global management. Multinational companies in the USA account for less than 1\%1% of all US corporations. However, they significantly contribute to the US economy’s growth and progress. In 2007, MNC contributed 23\%23% of US private-sector GDP. Since 1990, they have provided 31\%31% of real GDP growth and 41\%41% improvements in worker productivity in the United States. For example – Walmart is the world’s largest corporation, with total revenue of around $500 billion, has contributed to 3\%3% of the GDP ($18.5 trillion) of the U.S.A. in 2016.
The features of a multinational corporation are as follows:
Unity of Command/Control: MNCs operate in many countries, and their business decisions or action in host countries are managed by subsidiaries/local management officers. However, all the subsidiaries abide by the rules and policies of the Head Quarters based in the home country.
Turnover: The companies have a high turnover, market capitalization, and a huge number or volume of assets. For example, Apple’s market capitalization is around $1 trillion, which is larger than the entire economy of many Asian countries.
Management: The Chief Executive Officers, specialized professionals are very competent individuals. MNCs hire the best of the best for the key decision-making positions. Their human resources are skilled, knowledgeable, and proficient in their respective fields (finance, marketing, manufacturing, technology, etc.).
Superior Technology: They are equipped with the latest sophisticated technologies used in all business operations. The recent technologies include artificial intelligence, big data, the Internet of Things, data science, and robotics. MNCs have separate research and development departments dedicated to exploring more opportunities for the growth of the business.
Marketing and Promotion: MNCs are profit-centric and willing to expand wherever they can find opportunities. They use their wealth, connections, and business strategies to enter new markets. They use the methods of the marketing mix (product, price, place, and promotion) and SWOT (strength, weakness, opportunity, threat) to analyze the target market and scope of business.
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