What is a Multinational Company? For IB | A Level| IGCSE Business Studies | Edu Ignites|

Описание: What is a Multinational Company?
What is a Multinational Company? For IB | A Level| IGCSE Business Studies | Edu Ignites|
#MultinationalCompanies #IBBusinessManagement #EduIgnites

These companies have benefited greatly from the freedom offered by globalization. They just do not sell goods in more than one country. But they produce, and sell goods, and services in more than one country.
Welcome to our You tube channel. In this video, we are discussing Multinational Companies!
These are business organisations, that have headquarters in one country, but offices, production facilities, assembly plants in other countries. In other words, multinational companies are those with factories, plants, production, and service operations in more than one country.
A company may start in one country, and will spread to other foreign countries, expanding their investments. Thus, a national company becomes a multinational company. The significance of this type of company is that, though it spreads to many other countries, there will be a centralized management system, and the main decisions will always be taken by the home company. The other foreign corporations will be subsidiaries of the home company. But the big question is, why do firms, expand their operations overseas.
Reasons may include:
1. To expand into different market areas to spread risks.
2. To avoid trade barriers.
3. To stay nearer the market to reduce transportation costs. And,
4. To take advantage of lower-wage costs, abundant supply of raw materials, availability of good infrastructure, and government support.
Multinational companies can have both positive and negative impacts on the host country. Some of these include;
Multinational companies with their huge investment can boost the domestic economy by providing jobs, creating demand for local suppliers, and paying taxes to the government.
Along with the investments, these multinational companies also bring in new technology, and business ideas. These will help develop the skills of the employees of host country.
The consumers of host country will benefit from more choices of products, and also these companies also build, infrastructure like roads, schools for employee’s children, hospital and garden.
However,
Multinationals usually are big, and their scale of business is large enough to gain economies of scale, and operate efficiently and hence, local businesses may be forced out of business. Though they create jobs for the host country, mostly they are unskilled and low paid. MNCs also send back profits to the home country and also there is a threat to cultural identity.
In conclusion,
MNCs are business organizations, operate in more than one country.
These are believed to be highly beneficial for developing countries, in terms of bringing employment opportunities, management skills, latest technologies, and innovative ideas. In return, some MNCs get government support. Thus, MNCs play an important role in developing an entrepreneurial ecosystem in developing countries.
Students, make a list of at least five multinational companies operating in your country, and, write a short report on how these companies are helpful to at least three stakeholders.
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Key words
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IGCSE Business Studies 3rd edition By Kareen Borrington and P Stimpson.Published by Hodder Education.

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