What is Multinational Companies?
A multinational company is the one whose area of operation is not subject to only the base country but performs in different countries across the globe. In simple words, it can be said that these companies perform business on a global and international level.
They basically have a one central head office of the whole company. which is situated in the home country. which controls the operations of all the branches and offices across the globe. The directions and orders are given from the central office. To all the different branches and there is complete coordination among all the branches.
These companies have very high advertisement expenditure. Their turnover and eventually the profit is very high. These aims at providing high-quality products at appropriate prices to the customers. These companies also invest an appropriate amount of funds for the overall development of the society through their CSR activities.
These companies have a very effective role in economic development. They provide employment to a large number of peoples Worldwide. Providing them with the appropriate amount of incomes. Multinational companies also focus on a higher rate of efficiency. Because of their world-class and modern technologies available with them.
Features of Multinational companies
Large Scale Operations
The basic feature of multinational companies is that their area of operations is very large. They have a large production plant installed producing a large number of products at cheaper rates. They have a large number of resources in term of people, information, technology, and capital. Their efficiency is very high and has a very large and complex structure.
A Large Number of Branches
Another important feature of the multinational companies is that they operate at a global level and have their branches in different countries. Those are controlled through their centralized office situated in the home country of the company. There is full coordination between all these branches and the head office and these branches works fully at the directions of the head office.
A Large Amount of Turnover
The amount of turnover of multinational companies is very high as it operates its business in different parts of the worlds. The amount of profit earned by these companies is very high due to which they are able to pay a good amount of salary to their employees. These also contribute an adequate amount in CSR activities which aims at the overall development of the country.
Multinational companies always aim at adopting the latest and the best techniques available in the market. Their main mission is to continuously grow at a rapid speed and always upgrade themselves and also doing various acquisitions and mergers from time to time for increasing their size.
High Products Quality
The products that are produced by the multinational companies are of very high quality as they are produced using the modern and the best technology available in the market. Also, these companies aim at providing these high-quality products at a cheaper rate by achieving highest efficiency which is achieved through mass production.
Large Scale Advertising
Another important feature of multinational companies is that they invest a very huge amount of money in their advertisement and publicity activities. They perform the advertisement activities all over the world as per there no. of branches available to keep the public informed of their products and latest offers.
Control from Home Country
The multinational company’s control their all branches available in different countries across the globe form their central and head office which is situated in the home country of the MNC’s. All the directions regarding the performance and various activities for the branches in different countries are given from the central office itself.