History of multinational company

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History of multinational company

Edit In view of the fact that the concept of multinational organization is comparatively young, there is a great variety of different definitions and interpretations of this term in business world.

Such synonyms like multinational firm MNFmultinational enterprise MNEmultinational corporation MNC or simply multinationals are quite widespread among scientific literature. Indeed, the interpretations may also differ, but in general they contain the following idea: In other words, MNO has activities in more than two countries.

The traditional view of MNO, from the early analyses History of multinational company the s and early s, is one of a large industrial company with operations in multiple countries and a centralized chain of command.

This example presents GM, a multinational enterprise, which over time has acquired companies through the world and established its own Greenfield investments in many countries acquisition of Adam Opel in Germany, ; Isuzu in Japan, ; Saab in Sweden, ; Daewoo in Korea, The key point is that GM is serving the markets in those countries due to acquired companies and affiliates.

In recent years, MNO have become engaged in increasing numbers of strategic alliances, which produce not only physical, but also intangible products and services product distribution, research and development, travelling, transportation.

Multinationals have evolved in complexity: The multinational organization is defined by where frontiers are drawn. In ancient Greece, these frontiers were the borders among city-states. In ancient Rome the boundaries were defined by the location of new administrative units of an expanding empire.

It is fare to say, that the history of the MNO is closely related to the trade in and between cultural communities, and those communities remain important in many sectors in the economy.

Knights Templar, endorsed by the Roman Catholic Church aroundcould be counted as the first multinational finance organization as it began banking in several countries in It is assumed, that the prototype for the first modern multinational enterprise was British East India Company, founded in by the British crown British East India Company had monopoly rights to conduct trade in India.

Moreover it eventually obtained military and governmental functions, making it possible to play a decisive role in the colonization of not only India, but also other eastern states. It became a monopolist in the trade with Ceylon, China, Japan and Indonesia. The main contribution to history was the fact, that the corporation was the first biggest stock international company in the world.

It had the rights in managing the war, engaging in political debates, coining money and creating colonies. Multinational organization is a concept that came into scientific and political lexicon, including the lexicon of the UN, after World War II to describe the huge international monopolies, which include large national companies with an extensive international network of branches.

That is, multinationals were a phenomenon that developed to take advantage of the fact, that governments, especially in Western Europe, opened their frontiers to foreign-owned companies. There are different concepts that explain the origin and development of the multinational corporations.

One of them - the relative narrowness of the domestic market in conditions of increasing volume of production with antitrust regulation of domestic markets in most developed countries and, thus, an objective need to enter the markets of other countries, not just with products, but also with the competitive advantages of the big monopolies.

Currently, the export of capital is the main form of expansion for both mature and for newly established multinationals. Due to the export of capital, multinational organizations currently constitute the most dynamic sector of the world economy.

Their investments are growing twice as fast as exports. Predominant form of capital exports are foreign direct investment FDIsince the ownership of the investment enables the investor control over the enterprise in which it has invested.

They are main exporters and importers of FDI. Inthey accounted for Horizontally integrated MNOs - controlled units located in different countries producing the same or similar items as the headquarters. Vertically integrated MNOs — headquarters manage a certain department in a country, which produce goods, delivered to their units in other countries.

Separate MNOs - controlled units located in different countries, which are not vertically or horizontally integrated. Very large MNOs have a budget that excesses the budget of some countries.

Essay on the Meaning and Definition of Multinational Company

Among largest economies in the world, 52 are multinational corporations and others are states. They have a great influence in the regions, as they have vast financial resources, public relations and political lobby.

Moreover multinational corporations play an important role in globalization. Indeed, they play a very important role in the world of research and development activities.China's multinational corporations have steadily climbed up the global rankings in recent years, and yet most of these companies are not internationally active or fully multinational.

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1 Multinational organizations – design and structure of global organizations Edit. In general, a multinational organization (MNO) is an enterprise that owns several production units .

Multinational Companies(MNCs) are large companies that operate in several countries at the same time.

History of multinational company

The first MNCs were established in the s. Many more came up in the s and s as US. The last time the multinational company was in trouble was in the aftermath of the Depression. Between and their stock of investment abroad fell by about a third relative to global GDP.

- Multinational enterprises date back to the era of merchant-adventurers, when the Dutch East India Company and the Massachusetts Bay Company traversed the world to extract resources and agricultural products from colonies (Gilpin ).

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