Prepared by :

Jaya Singh
MBA III Sem
What is a MNC?

Any business corporation which has holdings, management,

production and marketing extended over several countries ,
owns huge resources and extensive potentiality , and
encourages a collective transfer of resources among various
countries with a view of increasing profitability under a
centralized ownership is called a "multinational corporation”
Importance of MNC’s
 Vehicles of technology transfer to developing countries.

 They work to equalize the cost of factors of production around the world.

 Efficient means of integrating national economies.

 Contribute to R & D due to enormous resources.

 Help to increase competition & break down domestic monopolies.

 Functional nature of MNC’s
Functional nature of MNCs means the functions of Multinational Organizations which
they follow and succeed.

There may be five different functions of MNCs-

 Planning
 Organizing
 Staffing
 Leading
 Controlling
Functions in a MNC
Planning in MNC

 Involves Study of International and External environment to do SWOT analysis.

 Setting the objectives.
 To compete in world markets, form GSP (Global Strategic Partnership) with the local
players.

Organizing in the MNC

 To achieve corporate objective

 can appoint VP for all foreign branches. He will control these branches from Head Office.
 A MNC may organize the structure on the basis of production line. Eg; one manager will
be in charge of one product.
 Functions in a MNC
Staffing in MNC
 Select managers from the home country. These mangers will know
the values of the company clearly
 Select mangers from the host country. They will know the culture
of the host country.
 Select mangers from the third country.

Leading in MNC

 Involves motivating and communicating.

 Managers must have effective leadership qualities.
 Functions in a MNC
Controlling in MNC
 Involves monitoring actual performance and taking corrective
actions to correct deviations.
 A bit difficult process because of
 Revenue, cost, profits measured in different currencies.

 Foreign exchange fluctuations.