MULTINATIONAL

COMPANIES VERSUS
INDIAN COMPANIES
INTRODUCTION
Multinational Companies
A Multinational Corporation (MNC) or
transnational corporation (TNC), also called
multinational enterprise (MNE)..
 It is a corporation or enterprise that manages
production or delivers services in more than one
country. It can also be referred to as an
international corporation.
Examples of MNCs
Honda
IBM
Suzuki
Nestle
Johnson and Johnson
Intel
Nissan
Indian Company
A company formed and registered under the

Companies Act, 1956 (1 of 1956).
a company formed and registered under any law
relating to companies formerly in force in any part of
India (other than the State of Jammu and Kashmir and
the Union territories specified in sub-clause (iii) of this
clause);
i. a corporation established by or under a Central, State
or Provincial Act.
ii. any institution, association or body which is declared
by the Board to be a company under clause (17).
in the case of the State of Jammu and
Kashmir, a company formed and registered
under any law for the time being in force in
that State.
in the case of any of the Union territories of
Dadra and Nagar Haveli, Goa, Daman and Diu,
and Pondicherry, a company formed and
registered under any law for the time being in
force in that Union territory. 
Examples of Indian companies
Reliance Industries
Oil and Natural Gas Corporation
Infosys
Indian Oil Corporation
Hindustan Motors
ICICI Bank Banking
Tata Steel Steel
Bharti Airtel
FIVE YEAR PLANS
FIRST PLAN(1951-1956)
The first Indian prime minister, Jawaharlal Nehru
presented the first-five year plan to the
Parliament of India on December 8,1951.The plan
was allocated to seven broad areas, one of them
was industry.

Bhakra dam and Hirakud dam were initiated

during this period.
SECOND PLAN(1956-1961)
The second plan was focused on industry
especially on heavy industry.
Domestic production of industrial products
was encouraged, particularly in the
development of public sector.
The plan attempted to determine the optimal
allocation of investment between productive
sectors in order to maximize long-run
economic growth.
The plan assumed a closed economy in which
the main trading activity was centered on
importing capital goods.
 contd

Developments done during this plan:-

 Hydroelectric power projects.
 Five steel mills at Bhilai,Durgapur and Rourkela were
established.
 Coal production was increased.
 More railway lines were added in the north-east.
 Atomic energy commission was formed.
THIRD PLAN (1961-1966)
The third plan stressed on agriculture.
Cement and fertilizer plants were also built.

FOURTH PLAN (1969-1966)

Green revolution in India advanced agriculture.

FIFTH PLAN (1974-1979)

Electricity supply act was enacted in 1975,which
enabled the central government to enter into
power generation and transmission.
SIXTH PLAN (1980-1985)
Rapid industrial development especially in
the area of information technology.
This plan marked the beginning of
economic liberalization.

SEVENTH PLAN (1988-1989)

The plan stressed on improving the
productivity level of industries by up
gradation of technology.
EIGHT PLAN (1992-1997)
Modernization of industries was a major highlight
of the eight plan.
Gradual opening of the Indian economy was
undertaken to correct the burgeoning deficit and
foreign debt.
India also became a member of the World Trade
Organization.

NINTH PLAN (1997-2002)

The main objective was to create a liberal market
for increase in private investment.
PERIOD BETWEEN (1989-1991)
Dr. Manmohan Singh launched India’s free market
reforms that brought the nearly bankrupt nation
back from the edge.
It was the beginning of privatization in India.

TENTH PLAN (2002-2007)

Economic growth accelerated during this period
and crossed over 8% by 2006.
ELEVENTH PLAN (2007-2012)
The objective of the eleventh plan is to accelerate
GDP growth from 8% to 10% and then maintain at
10% in order to double per capita income.
A MULTINATIONAL
COMPANY
Example. JOHNSON AND JOHNSON
JOHNSON AND JOHNSON

J&J headquarters at One Johnson &

Johnson Plaza in New Brunswick
TYPE PUBLIC (NYSE: JNJ)

FOUNDED 1886
ROBERT WOOD JOHNSON 1
FOUNDERS JAMES WOOD JOHNSON
EDWARD MEAD JOHNSON

HEADQUARTERS NEW BRUNSWICK, NJ

AREA SERVED WORLDWIDE

EMPLOYEES 118,700 (2009)

 MAJOR DRUGS
INDUSTRY HEALTHCARE
SOAPS
SHAMPOO

PHARMACEUTICALS
PRODUCTS MEDICAL DEVICES
HEALTHCARE PRODUCTS
TOILETRIES
SOAPS
SHAMPOOS
PRODUCTS
REVENUE USD 63.747 Billion (2008)

OPERATING INCOME USD 16.929 Billion (2008)

NET INCOME USD 12.949 Billion (2008)

TOTAL ASSETS USD 84.912 Billion (2008)

TOTAL EQUITY USD 42.511 Billion (2008)

WEBSITE www.jnj.com
ENVIRONMENTAL RECORD
Johnson & Johnson has set several positive goals to
keep their company environmentally friendly, e.g. the
reduction in water use, waste, and energy use, and an
increased level of transparency.
Johnson & Johnson agreed to change their packaging
of plastic bottles, due to harmful chemicals used in
the manufacturing process, switching their packaging
of liquids to safe non-polycarbonate containers.
The corporation is working with the Climate Northwest
Initiative and the EPA National Environmental
Performance Track program.
As a member of the national Green Power Partnership,
Johnson & Johnson operates the largest solar power
generator in Pennsylvania at its site in Spring House,
PA.
AN INDIAN COMPANY
Example. HIMALAYA DRUG COMPANY
HIMALAYA DRUG COMPANY
(Himalaya Herbal Healthcare)
Type Private Limited

Founded 1930

Founders Mr. M. Manal

Headquarters Bangalore, India.

Area Served Worldwide

Over 67 Countries
Industry Health Care

Products •Pharmaceutical
•Personal Care
•Animal Health

Total assets 350 Crores

Website www.himalayahealthcare.com

Awards Awarded ISO 9001:2000 certification.

 Products
1. Pharmaceutical 2.Personal Care 3. Animal Care
Himalaya Drug Company
In March 2001, the company was granted a Good
Manufacturing Practices Certificate issued by the
licensing authority directorate of Indian systems of
medicines Bangalore.
Himalaya is the first ayurvedic facility to get GMP
certificate in India.
Himalaya Drug Company
It is the only phytopharmaceutical company
whose ayurvedic products Liv.52, a hepato
protective formula, is registered as a
pharmaceutical specialty in Switzerland.
The R&D wing of the company has been
recognized as a research centre by the Rajeev
Gandhi University of health Sciences, Karnataka,
India.
 Advantages of MNC’s
Greater level of employment opportunities.
Better and cheaper products are available to the
consumers.
The government will also benefit by earning more in
taxes.
Provide the host country with foreign exchange.
Invention of new technologies.
Strong financial position.
Increase in infrastructure improvements.
Disadvantages of MNC’s
By introducing new technology, MNC’s cause
technological unemployment.
They adopt capital intensive technique, so
machines replace workers.
Local professional cannot access working
strategies of MNC’s.
Higher sales cost as compared to Indian
companies.
Hurt domestic firms by eliminating competition.
 Advantages of Indian
Companies
Less stock market pressure as compared to MNC’s.
Cheaper products than that of MNC’s.
Provide employment opportunities to local
laborers.
Now listed on the New York Stock Exchange and
most of them are on NASDAQ.
Expanded their global outlook by setting up
centers globally in the US, China, Japan, Malaysia
etc.
 Disadvantages of
Indian Companies
Revenue wise Indian companies are slow growing as
compared to MNC’s.
Small in size.
Financial position is also not very strong.
No much monopoly on things like outsourcing,
consulting etc.
THANK YOU