MNCS IN INDIA

WHAT ARE MNCS?

MNCs are huge industrial organizations which

extend their industrial and marketing operations
through a network of their branches or their
Majority Owned Foreign Affiliates.

MNCs are also know

Corporation (TNCs).

as

Transnational

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

Private

Foreign Investment:-

Foreign

Aid:-

Can either be direct investment or indirect

foreign investment.

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
Multinational company can organize its operations in
CORPORATIONS
different countries through either of the following
alternatives:

Branches

Subsidaries

Joint Ventures Companies

Franchise Holders

Turn Key Project.

DEFINING SUCCESS FOR

MNCS IN INDIA

Capturing the Domestic Market Opportunity

Leveraging Indias resource base to derive

additional value for the corporation
R&D

/ Manufacturing / Sourcing / BPO

REASONS FOR THE GROWTH

OF MNCS

Expansion of market territory.

Marketing superiorities.

Financial Superiorities.

Technological Superiorities.

Product Innovations.

ADVANTAGES OF MNCS
MNCs have become vehicles of technology to the
developing countries
Greater employment and career opportunities are
provided by these MNCs.
MNCs
make commendable contribution to
inventions and innovations in the host country.
Practice of MNCs bring to the host country, the
latest technique in the field of management.
Varity of goods and services produced for local
customers.

DISADVANTAGES OF MNCS
MNCs create monopolies in the market and
eliminate local competitors.
MNCs may create depletion of resources due to
its continues use by these overseas companies.
MNCs generally carry out their R&D in their
home country and supply to the host country.
MNCs generally import huge raw materials due
to its continuous use by these overseas
companies.

EXAMPLES OF MNC IN INDIA