Which companies are known as multinational companies?
Answers
What Does Multinational Corporation Mean?
A multinational corporation (MNC) has facilities and other assets in at least one country other than its home country. Such companies have offices and/or factories in different countries and usually have a centralized head office where they coordinate global management. Very large multinationals have budgets that exceed those of many small countries. Multinational corporations are sometimes referred to as transnational, international or stateless corporations.Understanding Multinational Corporations (MNC)
Generally speaking, multinational corporations derive at least a quarter of their revenues outside their home country. Many multinationals are based in developed nations. Advocates of multinationals say they create high-paying jobs and technologically advanced goods in countries that otherwise would not have access to such opportunities or goods. On the other hand, critics say multinationals have undue political influence over governments, exploit developing nations, and create job losses in their own home countries.
The Rise of the Multinational Corporation
The history of the multinational is linked with the history of colonialism. Many of the first multinationals were commissioned at the behest of European monarchs in order to conduct expeditions. Many of the colonies not held by Spain or Portugal were under the administration of some of the world's earliest multinationals. One of the first arose in 1660: The East India Company, founded by the British. It was headquartered in London, and took part in international trade and exploration, with trading posts in India. Other examples include the Swedish Africa Company, founded in 1649, and the Hudson's Bay Company, which was incorporated in the 17th century.
Categories of Multinationals
There are four categories of multinationals that exist. They include:
- A decentralized corporation with a strong presence in its home country
- A global, centralized corporation that acquires cost advantage where cheap resources are available
- A global company that builds on the parent corporation’s R&D
- A transnational enterprise that uses all three categories
Differences Between Types of Multinationals
There are subtle differences between the different kinds of multinational corporations. For instance, a transnational — which is one type of multinational — may have its home in at least two nations and spread out its operations in many countries for a high level of local response. Nestlé S.A. is an example of a transnational corporation that executes business and operational decisions in and outside of its headquarters.
Meanwhile, a multinational enterprise controls and manages plants in at least two countries. This type of multinational will take part in foreign investment, as the company invests directly in host country plants in order to stake an ownership claim, thereby avoiding transaction costs. Apple Inc. is a great example of a multinational enterprise, as it tries to maximize cost advantages through foreign investments in international plants.
Largest Multinationals
According to the Fortune Global 500 List, the 10 largest multinational corporations in the world as of mid-2018 consolidated revenue were Walmart ($500.34 billion), State Grid ($348.90 billion), Sinopec Group ($326.95 billion), China National Petroleum ($326.01 billion), Royal Dutch Shell ($311.87 billion), Toyota Motor ($265.17 billion), Volkswagen ($260.03 billion), BP ($244.58 billion), ExxonMobil ($244.36 billion), and Berkshire Hathaway ($242.14 billion).
many companies from different parts of the world is centerly operated from one company is called multinational companies. Example. Samsung, LG, and others