What is a multinational company? Explain its features and give examples of multinationals operating in India.

Meaning of Multinational Company

The term 'multinational' consists of two different words — 'multi' and 'national'. The prefix 'multi' means many while the word 'national' refers to nations or countries. Therefore, a multinational company may be defined as a company that has business operations in several countries. According to the United Nations Commission on Multinational Corporations (MNCs), "A multinational corporation is a corporation which operates, in addition to the country in which it is incorporated, in one or more other countries."

Features of Multinational Companies

1. Operations in Multiple Countries — A multinational company operates in two or more countries simultaneously.

2. Large Size — Multinational companies are generally very large in size. They have huge capital resources, sophisticated technology and extensive operational scale.

3. International Resource Utilisation — Their purpose is to reduce transport costs and to make use of raw materials, labour, capital and markets of foreign countries.

4. Centralised Control — Although they operate in many countries, the overall control and major decisions are coordinated from a central headquarters located in their country of incorporation.

5. Advanced Technology — Multinationals use advanced and modern technology in their operations. They invest heavily in research and development.

6. Global Brand Image — They have established brand names that are recognised worldwide.

Examples of Multinational Companies Operating in India

• Coca-Cola Corporation
• Hindustan Unilever
• Infosys Technologies Ltd
• Sony