multinational corporation

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multinational corporation,

business enterprise with manufacturing, sales, or service subsidiaries in one or more foreign countries, also known as a transnational or international corporation. These corporations originated early in the 20th cent. and proliferated after World War II. Typically, a multinational corporation develops new products in its native country and manufactures them abroad, often in Third World nations, thus gaining trade advantages and economies of labor and materials. Almost all the largest multinational firms are American, Japanese, or West European. Such corporations have had worldwide influence—over other business entities and even over governments, many of which have imposed controls on them. During the last two decades of the 20th cent. many smaller corporations also became multinational, some of them in developing nations. Proponents of such enterprises maintain that they create employment, create wealth, and improve technology in countries that are in dire need of such development. Critics, however, point to their inordinate political influence, their exploitation of developing nations, and the loss of jobs that results in the corporations' home countries.

multinational company

or

multinational corporation

a company which operates from a home base in one country with subsidiaries in others. The term transnational company has increasingly been preferred to describe large international corporations since they may not have an easily identifiable home base. World economy and trade is increasingly dominated by such companies which many authors see as outside the control of national governments. This raises issues of the control which such governments have over their own economies. Whilst the role of multinational companies has been decisive for the fate of THIRD WORLD economies and is central to the concept of IMPERIALISM and NEOIMPERIALISM, the largest companies have the majority of their investments in industrial countries. Investment in the Third World may not be the most important area for multinational companies, but they derive high profits from such investments and the effect on small Third World countries can be very significant. See also DEPENDENT INDUSTRIALIZATION, DEPENDENCY THEORY, UNEQUAL EXCHANGE.
References in periodicals archive ?
Rassier, an economist with the Bureau of Economic Analysis (BEA), proposes improving the System of National Accounts 2008 (SNA) treatment of transactions within MNEs by differentiating between the concept of legal residence, the principle that effectively guides the treatment of MNEs in the SNA, and the concept of economic residence in the SNA's rest of world accounts.
To effectively serve such a heterogeneous customer base, manage a highly multicultural workforce, and navigate the varying (and at times inconsistent) jurisdictional rules represented by the countries in which an MNE has such customers and employees, MNEs need to continuously juggle and adapt business models, organisational practices, conflicting compliance requirements, and management structures.
Against the background of the idea of Levitt that MNEs should not customize products and services to cultural differences, but rather should offer standardized products and services because of the highly homogenized global consumer preferences, chapter 9 demonstrates arguments, under which circumstances Levitt's (1983) idea leads to bounded rationality problems by MNE managers, managers' overestimation of the transferability, deployment and exploitation potential of firm-specific advantages and results in defective global strategies.
Generalized conclusions from this research can apply to any MNE that has subsidiaries operating overseas.
Batelco embarked on its MNE 2010 project, at an investment of BD14.
Devereux and Engel (1999), on the other hand, show that if the MNEs are serving the host market, then exchange rate volatility can be loosely associated with higher MNE activity.
But in 2009 no Indian MNE had reached Stage 3 (mature MNE), in which the firm's international competitive advantages were not tied to capabilities and resources developed in the home market, in which overseas production was a large multiple of exports from India, and in which the firm possessed strong global brands and cutting-edge technologies.
However, such analysis ignores the subtler aspects of the location's business culture (Casson, 1991) and its overall attitude towards MNE investors.
The theory of multinational enterprise (MNE) examines conditions under which firms may undertake FDI and become MNEs.