Definition of MNCs
Jacques Maisonrouge, president of IBM world trade corporations defines an MNC as a company that meets five criteria:
1) It operates in many countries at different levels of economic developments.
2) Nationals manage its local subsidiaries.
3) It maintains complete industrial organizations, including R and d and manufacturing facilities in several countries.
4) It has a multinational central management.
5) It has multinational stock ownership.
James C. Baker also defines MNC’s as a company:
1) Which has direct investment base in several countries.
2) Which generally derives from 20% to 50% or more its net profits from foreign operations.
3) Whose management makes policy decisions based on the alternatives available anywhere in the world.
A significant share of the world’s industrial investment, production, employment and trade are accounted for by these more than 65000 MNC’s with over 8,00,000 affiliates.
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