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Multinational corporation (MNC)

Multinational corporation (MNC) – a large company with plants or other direct investment in one or more foreign countries. It is also called an international corporation or a transnational corporation. Typically, the multinationals have operated in developing countries, where they provide technology, finance capital, and marketing skills in return for a profitable market. But even advanced industrial nations may be the scenes of investment by multinational companies. The power that multinationals can exert over foreign governments has been the target of criticism, but many host countries have imposed regulations that have given them a larger share of profits, jobs, and markets.

Multinational corporate structure

Multinational corporations can be divided into three broad groups according to the configuration of their production facilities:

- Horizontally integrated multinational corporations manage production establishments located in different countries to produce the same or similar products. (example: McDonalds)
- Vertically integrated multinational corporations manage production establishment in certain country/countries to produce products that serve as input to its production establishments in other country/countries. (example: Adidas)
- Diversified multinational corporations manage production establishments located in different countries that are neither horizontally or vertically integrated. (example: Microsoft)