1. Multinational Company
A multinational corporation (MNC) or
multinational enterprise (MNE) is a corporation
enterprise that manages production or delivers
services in more than one country such facilities
having been acquired through the process of foreign
direct investment.
The country where the head quarter is located is
called the home country whereas, the other countries
with operational branches are called the host
countries. Apart from playing an important role in
globalization and international relations, these
multinational companies even have notable influence
in a country's economy as well as the world
economy.

2. Organizational Model
Multinational Corporation: This organization is
defined as a decentralized federation of assets and
responsibilities, a management process defined by
simple financial control systems overlaid on
informal personal coordination, and a dominant
strategic mentality that viewed the company’s
worldwide operations.
International organization model: In this model, the
structural configuration of which is described as
coordinated federation, many
assets, resources, responsibilities, and decisions
are decentralized but controlled from the
headquarters.

3. Global Organization Model: The global
configuration is based on centralization of assets,
resources and responsibilities; overseas operations
are used to reach foreign markets in order to build
global scale.
Transnational: In this, the specialized resources
and capabilities are dispersed among the various
operating units globally.

4. Merits of MNCs
MNCs help the host country in the following ways:
 Help increase the investment level and thereby the income
and employment in host country
 Enable the host countries to increase their exports and
decrease their import requirements
 They work to equalize the cost of factors of production around
the world
 Help increase competition and break domestic monopolies
 Provide an efficient means of integrating national economies

5. Demerits of MNCs
• Competition to SMSI
• Pollution and Environmental hazards
• Some MNCs come only for tax benefits only
• Diffusion of profits and Forex Imbalance
• Working environment and conditions
• Slows down decision making
• Economical distress

6. Why are MNCs in India
There are a number of reasons why the multinational
companies are coming down to India:
India has got a huge market. It has also got one of the fastest
growing economies in the world. Besides, the policy of the
government towards FDI has also played a major role in
attracting the multinational companies in India.
For quite a long time, India had a restrictive policy in terms of
foreign direct investment. As a result, there was lesser
number of companies that showed interest in investing in
Indian market. However, the scenario changed during the
financial liberalization of the country, especially after 1991.
Government, nowadays, makes continuous efforts to attract
foreign investments by relaxing many of its policies. As a
result, a number of multinational companies have shown
interest in Indian market.

7. Profits of MNCs in India
 Huge market potential of the country
 FDI attractiveness
 Labour competitiveness
 Macro-economic stability