Multinational Corporations (MNCS)

The term multinational corporation (MNC) can be defined and described from differing perspectives and on a number of various levels, including law, sociology, history, and strategy as well as from the perspectives of business ethics and society. Certain characteristics of MNCs should be identified at the start since they serve, in part, as their defining features. Often referred to as “multinational enterprises,” and in some early documents of the United Nations they are called “transnational organizations,” MNCs are usually very large corporate entities that while having their base of operations in one nation—the “home nation”—carry out and conduct business in at least one other, but usually many nations, in what are called the “host nations.” MNCs are usually very large entities having a global presence and reach. Names and company logos such as those of Coca Cola, Exxon Mobil, Mitsubishi, and Royal Dutch Shell are good examples. Today, however, we are also witnessing a rapid growth of smaller- and medium-sized enterprises that also conduct business in multiple nations and also have a global presence and reach. Hence, MNCs can be understood as either large or smaller corporate entities that operate on a global scale even though most people think of the MNC as a huge conglomerate with business offices, plants, or facilities worldwide.

MNCs have also undergone great structural changes over the years and they engage in many different and varied kinds of businesses. In addition to the basics of the production, manufacturing, and trading of goods, today MNCs can be found working within a host of business activities that include the delivery of services such as banking or communications both locally and globally, knowledge-based industries, foreign investment and currency exchange, maintaining branch offices or feeder plants in host countries, the extracting of natural resources, the assembly of products in one region (e.g., the maquiladora program in Mexico and elsewhere) for sale in another region, and various forms of technology transfer, among quite a few others. Hence, a picture of the typical MNC is difficult to draw, since there are so many variables and characteristics that can be depicted in the contemporary version of the MNC.