ENTRY OF MNC’S IN INDIA

Submitted by:

Taranjeet Kaur

12051

MBA 1st sem

WHAT IS AN MNC ???

MNC stands for MULTINATIONAL CORPORATION

WHAT IS A MULTINATIONAL

CORPORATION???

Manages production

In more than one country

Delivers services

And/or

It is a corporation that

Any company or a group that operates in many countries but is managed in a single country (home country) is a multinational company or multinational corporation

As ILO report says, “The essential nature of the multinational enterprises lies in the fact that its managerial headquarters are located in one country (home country) while the enterprise carries out operations in a number of other countries as well (host countries).

INTERNATIONAL CORPORATION(KOUTONS)

GLOBAL CORPORATION (PEPSI)

MULTINATIONAL CORPORATION (MICROSOFT, IBM)

TRANSNATIONAL CORPORATION(AUDI, BMW)

TYPES

1ST MNCIn world

•Dutch east India company

1ST MNC In INDIA

•IBM

1ST Indian MNC

•RANBAXY LABORATIES Ltd

Advantages

To the Home

Country

To the Host

Country

ADVANTAGES OF MNCS TO THE HOST COUNTRY:

Availability of latest technology

Management expertise from MNCs

Increase in investment level, employment level and income level

Increase in exports and decrease in imports.

ADVANTAGES OF MNCS TO THE HOME COUNTRY. Acquisition of raw materials from

abroad.

Opportunity of marketing the products all over the world

Employment opportunity

Benefit of foreign culture Maintain favorable balance of payment

in long run

DISADVANTAGES OF MNCS:

Adoption of ethnocentric approach in staffing leading to unemployment in host country

Discourage the domestic rate of saving & investment by making capital investment in the host country

Slow down in the growth of employment in home countries.

Transfer the capital from the home country to various host countries causing unfavorable balance of payment

MNC’s in INDIA

NEED FOR MNC IN INDIA

Technological gap. Undertaking the initial risk. Development of basic economic

infrastructure. Foreign exchange gap.

MNCs in India MNCs in India

THE INDIAN MNC’S…..

WHAT INDIA OFFERS??? One billion plus population.

India is ranked as the 11TH largest economy in terms of nominal GDP , 3RD largest in terms of Purchasing Power Parity(PPP).

Opportunities for U.S. exporters with the right products or services.

Easier access to capital.

17

Economic growth

Reduction in Unemployment

Technology gap

Initiating a higher level of investment

Excellent training grounds

Undertaking initial risks

WHAT INDIA HAS REALLY GAINED

KEY GAINS NOW…… Outsourcing Centers for key processes setup by various

MNCs

R&D Outsourcing – Pharmaceuticals, Engineering, IT, Telecom

Product development centers (Telecom, IT)

HARMFUL EFFECTS Encouraged demonstration effect Competition with small scale industries Providing prohibited goods Unfair trade practices Fluctuation in investment Production of profitable goods.

CONCLUSION

MNC’s have both merits and demerits..Special precautions should be undertaken to avoid demerits.

Due to the MNC’s,Competition has increased and

more employment opportunities are available..

AND soon INDIA will be as we Dream off…!!!