The paper “ Potential Disadvantages Facing Multinational Companies Doing Business Overseas” is a convincing example of the essay on business. A multinational company (MNC), also known as transnational or an international company (TNC) is one which has gone global and thus is able to capture R& D and production gains as well as marketing and financial advantages through operating in more than one country, thereby gaining over costs and reputation which is not available to domestic competitors. These companies have production and service premises outside their home countries where their base is (United Nations, 1973).
A global company of this stature views the entire world as one market; they rise above the limitations of national boundaries. These enterprises sell their products in most countries and manufacture them in many. They believe in getting the job done the best way they can and in the best-suited place in terms of market and other business conditions. Such a company would demonstrate certain characteristics: Common parent ownership headquartered in a particular country would manage a group of several other smaller units located in different parts of the world.
These multiple units are managed with their exclusive set of manufacturing and distribution centers and even a separate sales organization. Generally a hub & spoke model is followed where these multiple units draw upon their resources, money, credit, patents, information, and organization culture from the parent firm and thus have a shared pool of resources, expertise, and also database and information systems which supports these enterprises business models spreading over multiple locations across various nations. There is a centralized strategy that is replicated in all business units throughout the globe. Earn an estimated 25 to 45 percent of the revenue from foreign markets (Sturdivant & Vernon-Wortzel, 1990). The motivation to move across national borders lies in the various costs, values, and other strategic benefits.
Alliances such as joint ventures, mergers, acquisitions, and such collaborations add value by enhancing market reach, skills, resources, and experience. A need to expand the market share which would be limited in a domestic framework merits moving beyond regional and territorial boundaries.