Management of Multinational Corporations

Though there is no universally acceptable definition of MNCs they may be generally defined as companies that operate in more than one country and invest directly in operations instead of being involved in licensing, franchising, etc. The operations are not just confined to sales but also involve manufacturing and R&D.

MNCs tend to be oligopolistic and dynamic in sensing and exploiting local opportunities. The various subsidiaries of an MNC enjoy substantial autonomy in decision making, except in some critical areas, which are handled by the parent firm. MNCs can be vertically or horizontally integrated.

They can also take the form of conglomerates, joint ventures, or strategic alliances. The growth of MNCs in the last few decades may be attributed to the revolution in information technology and the removal of restrictions on capital flows by several countries around the globe. Many theories have been framed to explain the evolution of MNCs.