Discuss some features of MNC’s which distinguish MNC’s from public sector co. and public sector enterprises.
Discuss some features of MNC’s which distinguish MNC’s from public sector co. and public sector enterprises.
1 Huge capital resources:
a. They possess huge financial resources and the ability to raise funds from different sources.
b. They are able to tap funds from various sources.
c. They may issue equity shares, debentures or bonds to the public.
d. They are also in a position to borrow from financial institutions and international banks.
e. They enjoy credibility in the capital market.
2. Foreign collaboration:
a. They enter into agreements with Indian companies pertaining to the sale of technology, production of goods, use of brand names for the final products, etc.
b. They may collaborate with companies in the public and private sector.
c. There are usually various restrictive clauses in the agreement relating to transfer of technology, pricing, dividend payments, tight control by foreign technicians, etc.
d. Foreign collaborations have given rise to the growth of monopolies and concentration of power in few hands.
3. Advanced technology:
a. These enterprises possess technological superiorities in their methods of production.
b. They are able to conform to international standards and quality specifications.
c. This leads to industrial progress of the country in which such corporations operate since they are able to optimally exploit local resources and raw materials
4. Product innovation:
a. These enterprises are characterised by having highly sophisticated research and development departments engaged in the task of developing new products and superior designs of existing products.
b. Qualitative research requires huge investment which only global enterprises can afford.
1 Huge capital resources:
a. They possess huge financial resources and the ability to raise funds from different sources.
b. They are able to tap funds from various sources.
c. They may issue equity shares, debentures or bonds to the public.
d. They are also in a position to borrow from financial institutions and international banks.
e. They enjoy credibility in the capital market.
2. Foreign collaboration:
a. They enter into agreements with Indian companies pertaining to the sale of technology, production of goods, use of brand names for the final products, etc.
b. They may collaborate with companies in the public and private sector.
c. There are usually various restrictive clauses in the agreement relating to transfer of technology, pricing, dividend payments, tight control by foreign technicians, etc.
d. Foreign collaborations have given rise to the growth of monopolies and concentration of power in few hands.
3. Advanced technology:
a. These enterprises possess technological superiorities in their methods of production.
b. They are able to conform to international standards and quality specifications.
c. This leads to industrial progress of the country in which such corporations operate since they are able to optimally exploit local resources and raw materials
4. Product innovation:
a. These enterprises are characterised by having highly sophisticated research and development departments engaged in the task of developing new products and superior designs of existing products.
b. Qualitative research requires huge investment which only global enterprises can afford.
