Question

In your own words, please describe what 'multinational corporation' is, and what would be some of the main reasons for such companies to expand internationally.

(1 to 2 paragraphs minimum required)

Answer 1

1st part (Multinational Corporation):

It is the corporate organization that is having the global existence across all the parts of the world in providing services and production of goods as per the requirements of the customers. Such a corporation is having a global existence across different corners of the country with having a centralized head office that controls all the subparts for leading the processes of the business correctly.

Some of the important characteristics of Multinational Corporation are as follows:

1.            High turnover: For a multinational corporation, the targets are always kept higher for obtaining more profits. It is required to have a lump of financial hold and should own heavy physical assets.

2.            Stable control: The management of the multinational corporation is operated from the head office and a strict follow up at all other branches in distinct countries are made by the centralized head office.

3.            Use of correct technology: For their extended production process it is required to utilize the intensive technology. Also, to make sure that the investment made for the technology should revert back by achieving the growth.

4.            High marketing and advertising: It is a vital strategy for Multinational Corporation to do investments in advertising and marketing to sell their product globally.

2nd part (reasons):

The expansion of the companies occurs to provide the services and made selling of the goods across internationally for obtaining huge revenues. Likewise, a small company has initiated business into some parts of the country. Gradually, due to extensive demand and quality of service, it is ruling the market. To fulfill the customers’ demands across from all the parts, it has to set up branches at distinct corners of the world to facilitate the smooth service.

Therefore, while having a global demand for products that the company produces, it will definitely get the opportunity to excel in the business process. In this way, settling of branches from one country to another if the demand increases by providing better quality services, it will excel the standardize height and own the reputation in the market. Thus, for the enrichment of quality service, it will receive the tag of Multinational Corporation and side by side huge sum of revenues will be obtained for the global set up of the business. These are some of the highlighted reasons for the companies to explore the business expanding process.