GLOBALIZATION AND MULTINATIONAL COMPANY DETAILS

GLOBALIZATION :

Meaning :

Globalization is the integration of international markets for goods and services, technology,

finance and to some extent labour it is the integration of the country with the world economy.

It implies that the linkage of a nation’s market with the global market. Globalization

encourages Foreign Direct Investment (FDI) the FDI not only. Augments the domestic

ingestible resources but also stimulates exports. The International Monetary Fund (I.M.F.),

World Trade Organization (W.T.O.) and the World Bank is global bodies that are viewed as

the agents of this globalization process. The so-called ‘free trade’ agreements, such as the

General Agreement on Tariffs and Trade (G.A.T.T.) and the North American Free Trade

Agreement (N.A.F.T.A.) are seen as catalysts for increasing the globalization activities.


Multinational Company (MNC):

Meaning: A Multinational Company is one whose ownership is accommodated in more than

one country. Products are manufactured in many countries and sold in many countries. For

example. Toyota of Japan, General Motors of U.S.A. Indian Oil Company of India is

Multinational companies. Jacques Maisonrogue, the president of IBM world Trade

Corporation defines MNC as a company that meets the following five criteria.

1) It operates in many countries at different levels of economic development.

2) Multinationals manage its local subsidiaries.

3) It maintains complete industrial organizations, including Research and Development and

manufacturing facilities in several countries.

4) It has multinational central management.

5) It has multinational stock ownership.