MULTINATIONAL

COMPANIES ARE
BETTER THAN
INDIAN
COMPANIES

Introduction:
Multinational Companies (MNC)

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.

IMPACT
ON
LOCAL
AND
NATIONAL ECONOMIES BY MNC
Multinationalcorporationsaffect
local
and
national policies by causing governments to
compete with each other to be attractive
tomultinational corporationinvestment in their
country.
e.g. - Walmart is an example of a large
multinational
corporation
that
often
exertsinfluenceon political processes through
lobbying, contributions to campaigns, and threats
of market withdrawal.

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 subclause (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
Tata Steel Steel
Bharti Airtel

Advantages of
Greater level of employment
opportunities.
MNCs

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.
Helps removal of monopoly and improve the
quality of domestic made products.

Disadvantages of
By introducing MNCs
new technology, MNCs
technological unemployment.

cause

They adopt capital intensive technique, so machines

replace workers.
Local professional cannot access working strategies of
MNCs.
Higher sales cost as compared to Indian companies.
Hurt domestic firms by eliminating competition.
The host nation may also experience some loss of
control over its own economy
Feeling that labour is being exploited by the MNC/
Outsourcing
Lost of cultural moorings
The problem of Dumping

Advantages of Indian
Companies
Less stock market pressure as compared to

MNCs.
Cheaper products than that of MNCs.
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 MNCs.

Small in size.
Financial position is also not very strong.
No much monopoly on things like outsourcing,
consulting etc.

CONCLUSION

Majority of foreign subsidiaries operating in

India either belong to the U.K. (68%) or the
U.S.A. (15%).
Most of the foreign subsidiaries have raised
financial resources from within India, and
the transfer of capital from the parent
company has been marginal.
A number of foreign companies in India are
acquiring the character of multi-product and
multi-industry enterprises.
The assumption that the entry of MNCs
would ensure transfer of sophisticated
technology to developing countries has not
been found valid in practice.

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