Evolution and present Situation of Multinational Corporations

Each year Fortune Publishes a list of several admired United States corporations. Several organizations are multinational, largely in operations and philosophy (Shapiro, 2009). In contrast, the least admired tends to be national organizations with much little proportion of sales, profits or assets derived from foreign operations. Held (1999, p 242) describes that in the postwar period the multinational corporations has gained a global presence.

Although economic efficiency and multi nationality do not potentially go hand in hand, international business is of vast necessity to a developing number of non US and US organizations (Chandrasekhar, 2008). The list of big firms in America that gain 50% or more of their profits and revenues from foreign countries and which have a shapeable fraction of their properties abroad read like a corporate’s are  Gillette, Colgate Palmolive, Motorola, Hewlett Packard, Dow Chemical and McDonald’s. In 2000, Pfixer earned around 100% of its profit in foreign countries while Apple Computer earned more than 90% of its profit overseas in foreign countries. Industries vary widely in the extent to which the foreign operations are in necessity to them. In 2000, Exxon Mobile had 65% of its assets, 70% of its sales and 60% of its profits abroad. Similarly General Motors produced 62% of its revenue overseas, in contrast to overseas operations loss for Ford Company..

Multinational corporations perform under varied taxes, tariffs, political risks, accounting standards or policies, currencies, government regulations and inflations. The degree of internalization of the economy all over the world is growing tremendously. Thus it can be understood that today multinational corporations are emerging in numerous volumes in each and every part of the world.

References

  • Chandrasekhar K S (2008), “Marketing Management Text and Cases”, Tata McGraw Hill, New Delhi, p 398.
  • Held D (1999), “Global transformations: politics, economics and culture”, Stanford University press, USA, p 242.
  • Shapiro A C (2009), “Multinational Financial Management”, John Wiley & Sons, New Delhi, p 8.

Priya Chetty

Partner at Project Guru
Priya is a master in business administration with majors in marketing and finance. She is fluent with data modelling, time series analysis, various regression models, forecasting and interpretation of the data. She has assisted data scientists, corporates, scholars in the field of finance, banking, economics and marketing.

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