Multi National Corporations Disected

MNCs

An Enterprise, which allocates company resources without regards to national frontiers, but is nationally based in terms of ownership and top management. It comprise of three words multi, national and corporations. These words together means that corporations which have established their offices to increase the interaction either by their own efforts or by collaborations with other companies. Thus Multinational represents highest level of overseas involvement and is characterized by global strategy of investment, production and distribution. MNCs are enterprise which owns or controls production or service facilities outside their home country.

Classification of MNC by behavior

1.Ethnocentric: These are the type of MNCs which have strong orientation towards home country. This means that home country people are considered as superior and allocated all key posts.
2.Polycentric: Just opposite to Ethnocentric polycentric type of MNCs has strong orientation towards host country where few key people are nationals and remaining are from the host country.
3.Regiocentric and Geocentric: These MNCs have their concentration in whole world and they make selection for best employees whether they are from host country or home country it does not matter.

Characteristics of MNCs

1.Single Managerial Authority control
2.Worldwide Integration, better profitability
3.Global Perspective
4.Close Coordination in parents & affiliates
5.Worldwide Market

Benefits of MNCs

1.Training of domestic manpower
2.Increase pace of economic development
3.Promote better products at lower costs
4.Employment to labour
5.Increase in production, GDP, exports
6.Increase in Governments revenues

Criticism of MNCs

1.Increase gap between rich & poor countries
2.Misallocate & misuse scarce natural resources
3.Home country loses jobs when MNC overseas
4.Employ transfer pricing
5.Aggravate Unemployment in developing countries
6.Competition from MNCs local Industry

Entry Strategies used by MNCs

1.Exporting
2.Licencing
3.Joint Ventures
4.Manufacturing
5.Contract Management / Turnkey Projects

Arguments in support of MNCs in India

1.Change in Perception
2.Economic Arguments
3.Technology Transfers
4.Foreign Investment vs. Borrowing

Benefits of Indian Liberalization to MNCs

1.Positive steps taken by government
2.Effect of these steps

Direct Benefits to India of the increasing presence of MNCs

Increasing scope of professional Education
Increasing competition among states for FDI
Expanding Indias consuming class
India as a source of Inputs
Infrastructural gains

Criticism of MNCs in India

1.Inappropriate products launched by MNCs
2.Overshadowing Domestic Industry
3.MNCs and child labour
4.Workers Exploitation

MNCs and FUTURE

Leading Global Business intelligence and consultancy firms such as Giga, Forester Research and McKinsey & Co. have cited various reasons for the increase of offshore outsourcing by MNCs to India.

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Public Sector Networks Confuse Government It Professionals

of public servants working in an IT or commercial function do not know where their organisation stands in the process of adopting a public services network (PSN). The PSN is core to the governments ICT Strategy with the Cabinet Office estimating it could save up to 130m a year in central government by 2014.

In three years time the government wants 80 per cent of its PC based staff to be using the network, thats around 4 million users.

The survey which found these restuls was by BT and entitled the PSNsus Survery. It asked 1,300 public servants from a range of professional areas and sectors in January this year to get an idea of whether the public sector is moving towards the governments goal of creating a shared information and communications infrastructure.

There does, however appear to be more awareness of PSNs in local government, with the figure rising to 69% for Central Government respondents being unaware, which compares to only 31 % for local government.

In my experience there is a huge amount of innovation happening in local government when compared with central government, said Neil Rogers, president of global government at BT Global Services.

The PSN will create a network of networks by joining up organisations, departments, authorities and agencies that deliver public services at local, regional and national levels. The public sector will be sold PSN services by a number of providers, who will then connect to Direct Network Service Providers (DNSPs) via the Government Conveyance Network (GCN).

The GCN is the backbone to the PSN and acts as the gateway between the networks of different service providers. BT, Virgin Media, Cable & Wireless and Global Crossing have all agreed to mesh together their networks to create a single network for the PSN.

Its not all bad; the survey did find that 44% of IT savvy public servants knew what stage their organisation was at in adopting a PSN. However, only 12% were carrying out initial scoping exercises, and 9% have implementation in place. These numbers are low but Rogers believes that they should not be cause for concern. As the scale of the project means that it will take time to create the governments vision for a fully connected PSN.

The PSN is core to the governments ICT Strategy with the Cabinet Office estimating it could save the public sector up to 130m a year in central government by 2014.

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