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.
MNCs contribute to the USA’s economy by generating employment, increasing productive capacity, providing support via corporate social responsibility, and promoting the image of the home country at the global level. Incorporating political, social, economic, and environmental issues into their corporate operations contributes to the nation’s overall progress. Large-scale business operations are beneficial for both the home and host nations. MNCâ€™s contribute to economic progress, innovation, technological advancement, and upliftment of the standard of living of individuals. Now, companies are actively contributing to social progress and environmental protection under the clauses of corporate social responsibility. Besides all the monetary gains, MNCâ€™s act as interlink among several diverse cultures, thus, contributes to the social and cultural integration at the international level.
Challenges for the MNCâ€™s
Top MNC executives believe that the current US policies, notably in corporation taxes, immigration of skilled workers, and administrative barriers, are not conducive to progress at the global level. MNC(s) located in the United States are powerful enough to function domestically and globally. Competition from domestic and international companies creates challenging situations for MNCâ€™s. However, it also helps in promoting healthy competition among the companies that ultimately benefits the customer or consumers. In this era of globalization and privatization, MNCs are moving to fast-growing emerging markets (such as Asia’s developing countries) and other advanced economies. MNC’s business operations are affected by political instabilities, economic uncertainties, and global trade rules/regulations/policies. Emerging markets are offering tax rebates, subsidies, and other infrastructure facilities to attract global companies. Emerging markets are being portrayed as business hotspots, where business activities can be undertaken at a lower cost than in the United States.
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