MULTINATIONAL CORPORATIONS

Created by Maria Matveeva

Maria Musaelyan

Kate Belyashina

Anna Lundberg

Julia Mónica Ortiz De Manuel

Contents

① Definition

② Organization

③ Globalization

④ Pros & Cons

⑤ Diffussion of org.knowledge

⑥ Economics and Politics

⑦ Examples of MNC’s

⑧ MNC’s in Russia

⑨ Inditex – operation in Russia

Definition

Multinational Corporation is a business organization whose activities are located in more than two countries and is the organizational form that

defines foreign direct investment.

The economic definition emphasizes the ability of owners and their managerial agents in one country to control the operations

in foreign countries.

Organization of multinational corporations• The United States

International division

Problems:

Area division and Product

division

More responsive to local

differences and tastes

• Price set by domestic

market – not competitive

• Products did not correspond

to foreign tastes

• Managers across areas

did not cooperate

AdvantagesDisadvantages

Organization of multinational corporations

Europe

*Holding company structures

*banks or other financial institutions played powerful roles in ownership

*complex financial webs

*subsidiary and a headquarters that held a portfolio consisting of ownership control over dozens of

companies, in the same sector but located in different countries.

Globalization

Due to implementing new digital technologies, the gap between poor and rich countries is increasing

Local and national governments always try to attract MCs because it is a huge investment into the economy, they provide employment, choice of

multi goods and etc.

Pro’s & Con’s

Pro’s Con’s

Advanced technology and low-cost products.

Workers and natural resources

Spread Technology Social Protection Fall

Cheapest sources of labour Manipulation

Have a wider market Global competition

Economies of scale in marketing and distribution

Foreign influence

Diffusion of organizational Knowledge

Central Feature

Diffusion of organizational Knowledge

Subsidiaries

Economics and Politics of Multinational Corporations

Developing Countries: • Loss of Independence

• Technologies

• High productivity Level

Examples of MNCs

MNC’s in Russia

• are global players

The largest by foreign assets and foreign sales

The leader in production

Global energy business:- entry into new markets; - diversification;- ensuring consumerssupplies

Entities inmany countries

The example of Inditex in Russia

-Based In Arteixo (Spain)

-The largest clothing retailer in the world

-5,500 stores worldwide

-274 stores in Russia

- Inditex is not among the biggest retailers in Russia

-the Spanish group’s revenues went up 20 percent in 2011 to 13.6 billion rubles (about $433 billion)

- In terms of revenue, the Spanish company is the 47th largest retailer in Russia

THANK YOU FOR YOUR ATTENTION

Which countries are against multinational Corporations and which are not?

Name three Pro’s and three Con’s of Multinational Corporations

What was the classic organizational problem that different national structures met?

Name the one MNC in each country that you have heard

What is the largest MNC in Russia and why ?