Multinational Companies (MNCs) Defined
Many authorities, academics and authors have defined several multinational companies from different perspectives. Some of these definitions are meticulously written below:
The Research Machines (2004) gives four definitions to multinationals. First, it defines MNC as a corporation that has its facilities and other assets in at least one country in addition to its country of origin, or that has offices and / or factories in different countries and generally has a central headquarters where they coordinate global administration. Second, it defines multinational companies as a commercial company with manufacturing, sales or service subsidiaries in one or more foreign countries, also known as Transitional or International Corporation (TNC or INC).
The third definition given by Research Machines is one that considers MNC as a company or company that operates in several countries, generally defined as one that has 25 percent or more of its production capacity located outside of its country of origin. origin. The last definition as given considers MNC as a corporation or company that manages a production establishment located in at least two countries.
All these definitions, according to Research Machines (2004) identify that multinationals operate outside their own country of origin. The first definition of Research Machine points to a crucial point that multinationals also acquire assets in these foreign countries where they operate and possibly have offices / factories to facilitate the achievement of objectives. This means that they prefer to use the resources available in the host country. He also added that multinationals do have a place; Usually, global headquarters are also launched. This means that reports on finance, sales, purchases, marketing, etc. they are properly coordinated and accounted for at headquarters.
The second definition of Research Machines points to another vital point about MNC that states that its services are not limited to manufacturing, but also includes selling and remembering services through sales and service subsidiaries. The third definition of Research Machines goes further to assign the percentage to the production of multinationals. It established that, for a company to be called a multinational, it should have exported its 25 percent production to other countries. What can be inferred from this is that a company may be operating outside of its country of origin, but it can not be called MNC, except that it has distributed 25 percent or more of its production to outside countries.
The Encyclopedia of Management (2005) Put multinational companies as companies concerned with the operation in more than one country. These operations outside the country of origin of the company can be linked to the parent by merger, operate as subsidiaries or have a considered autonomy. According to Drucker (1974), the multinational company grew out of the appearance of a genuine demand of the world market that transcends national, cultural and ideological borders, due to the explosion of information.
Iyayi, Agbonifoh and Ehiametalor (1984) consider multinational companies management with several layers of management decision-making bases from local to regional to global. In the words of Hodgetts and Luthans (1997), multinational companies are companies that operate in more than one country, international sales and a combination of nationalities of managers and owners. Coventry (1981) and Johansson (2000) give the same definition to multinational companies, as companies that usually have several production sites abroad and, therefore, several international markets.
According to all these definitions highlighted above, it could be said that everyone took a multinational company and defined it from structural, functional and geographic perspectives, and from a geographical point of view.