Multinational, International,

Transnational and Global

Corporations

Kavyalakshmi k
 Multinational corporations
Meaning

A Multinational corporation is one which is

incorporated in one country (called the home
country) but whose operations extend beyond the
home country and which carries on business in
other countries (called the host countries ) in
addition to the home country.
 Definitional Dimensions
Some of the criteria often used to define the
MNC are given below:-
• Definition by size
• Definition by structure
• Definition by performance
• Definition by behaviour
 International corporation
• Characterised by high parent control of foreign
subsidiaries
• International corporations are the corporations,
who sell its products in foreign countries by
exporting it to those countries and they might
also be involved in various importing activities.
• These companies do not have their own
establishments in foreign countries.
• They do not have any foreign direct investment
in the foreign countries.
 Global corporations
• Any company, which having operations and
trading in many countries across the world is
called a Global Corporation.
• Mostly have FDI in some or all of the foreign
countries where they operate in.
• The organisation structure and key decisions
making functions have a Centralised approach.
 Transnational Corporation
• Mixture of Global, Multinational and
International corporations, as it combines
many of the features of these 3 types of
companies.
• Decentralized organisation structure
• Mostly have FDI in many of the foreign
countries where they operate in.
 CHARACTERISTICS OF DIFFRENT
ORGANISATIONAL MODELS
Multinational organisational model
According to Barlett and Ghoshal, the
multinational organisation is defined by the
following characteristics: a decentralised
federation of assets and responsibilities, a
management process defined by simple financial
control systems overlaid on informal personal
coordination, and a dominant strategic mentality
that viewed the company’s worldwide operations
as a portfolio of national business.
 International organisation model
• The structural configuration of which is
described as coordinated federation, many
assets, resources, responsibilities and
decisions are decentralised but controlled
from the headquarters.
 Global organisational model
• The global configuration is based on
centralisation of assets, resources and
responsibilities
• In the global model, management treats
overseas operations as delivery pipelines to a
unified global market, from a centralised hub.
• Authority an decision making are centralised
 Transnational organisational model
• Seeks to eliminate some of the drawbacks o
other models.
• The specialised resources and capabilities are
dispersed among the various operating units
globally.
• It is complex process of coordination and
cooperation in an environment of decision
making.