The Dutch East India Company was the second multinational corporation in the world the first, the British East India Company, was founded two years earlier and the first company to issue stock, and it was the largest of the early multinational companies. Factors such as product obsolescence, fickleness of market, emergence of newer technologies are threat to concentrated firm Mangers may not be able to sustain interest and find the work less challenging. Strengthening India's own administrative frame and building the capacities to pick what we need and at a price not only that India can afford but that is the lowest in the international market, is the first step in the right direction. Horizontal integration strategy may be frequently adopted with a view to expand geographically by buying a competitors business, to increase the market share or to benefit from economics of scale. Primary and Secondary.
It involves direct contact with the companies and the people associated with it. A pooling of resources, investment and risks occurs for mutual gain The partner firms contribute on a continuing basis in one or more key strategic areas, for example, technology, product and so forth. Looking forward In other emerging countries, MNCs have grown manifold and have become a major force. Remittance of dividends and profits that can result in a net outflow of capital. Therefore, the top executives have no national hang-ups.
A firm which has the power to coordinate and control operations in more than one country, even if it doesnt own them.
Strategic alliances offer a growth route in which merging ones entity, acquiring or being acquired, or creating a joint venture may not be required 16 P a g e Global partners can help local firms by developing global quality consciousness, creating adherence to international quality standards, providing access to state of the art technology, gaining entry to world wide mass markets, and making funds available for expansions. Coming back to the recent policy announcement, even if one accepts the official explanation that automatic entry of foreign investment up to 40 per cent is allowed only in specific areas, would such a policy continue to be applicable to the existing MNCs? Loss of tax revenue. What the MNCs, however, insist upon would be the right to brand names. It realized there was a huge market for an alternative to the Maruti and changed the market-entry vehicle from the Accent to the Santro. Expand Over the years, the business reasons drawing multinationals to India have evolved, and based on their market focus, MNCs can be grouped into three distinct categories: those that look on India as an end market, treat it as a centre for back-office functions, or as a global business hub including for exports.
It involves a substantial change in the business definition singly or jointly- in terms of customer groups or alternative technologies of one or more of a firms businesses. In operational terms, however, no large MNC has one nationality. This has served to strengthen the influence of decisions made by private bodies on world economic activity, and to that extent to limit the effectiveness of governmental policy decisions. India remains an unavoidable draw for MNCs even when their first efforts fail.
MNCs offer higher wages to its employees in the host countries, which is much more than any other domestic firm.