Advantages of multinational companies

Advantages of Multinational Companies L谩szl贸 Kocsis in Erasmus+ Program, Kiskunhalas, Saint Joseph Catholic Primary School, 2015 May 14, Thursday

Agenda What is a Multinational corporation? Entry to New Markets – Motivation and Advantages Concerns about Multinational corporations - Disadvantages Future of Multinational corporations

Multinational corporations Introduction  Multinational corporations have existed since the beginning of overseas trade  Example: British East India Company during the age of colonization  Despite their clear economical advantages  …today are viewed with increased suspicion

What is a Multinational corporations?

Abbreviation: MNC's

A multinational corporation is a business concern with operations expanded in more than one country Phasing of presence Selling home country products at host countries Moving production to host countries Headquarter functions reallocated to a host country

Why? Following their economical interest: profit and growth  Note: Service providers/suppliers typically following their customers

Entry to New Markets Motivation of MNC's Marketing the products produced in the home country throughout the world Employment opportunities to the people of home country both at home and abroad. It gives a industrial boost to the home country. Home country can also get the benefit of foreign culture brought by MNC's.

Entry to New Markets Advantages to host Countries

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Boosting economy: investment, employment and revenue Latest technology Management expertise Create competition on markets Use of MNC's R&D outcomes in host country

Multinational Companies are BIG COMPANY

GDP Country Turkey Poland Norway Romania Hungary Bulgaria Estonia

USD,b

Wal-Mart Stores

822 526 513 190 133 54 25 2,263

COUNTRY INDUSTRY United States United States

Retailing

SALES ($BIL)

378.8

Total

Oil & Gas Operations Oil & Gas Netherlands Operations United Oil & Gas Kingdom Operations United Oil & Gas States Operations Consum er Japan Durables Oil & Gas France Operations

ING Group

Netherlands Insurance

197.9

General Motors

United States

181.1

ExxonMobil Royal Dutch Shell BP Chevron Toyota Motor

Consum er Durables

ď‚´The first 9 Forbes MNC sale turnover is bigger then total GDP of 7 countries

358.6 355.8 281.0 204.0 203.8 199.7

2361

Countries are inviting them to invest i.e. a Hungarian leaflet

Billions of EUR foreign investments every year EUR,b Turkey 22-13 Poland 16-18 Hungary 6 -15

All of them is MNC

Working for Multinational corporations:

László Kocsis 1991 HASBRO Toys and Games, marketing and sales

1996 AVON Cosmetics, marketing, sales, packaging

1999 DELPHI Automotive, air-conditioning compressors, production

Experiences: professional organizations, carrier opportunity, meaningful job, customer orientation

Corporate Culture Powerful Principles are Used in practice Mission, Vision, Objective Plan, Do and Check Human Resource Management Continues Improvement Personal Business Plan Technology is the same for all: the difference is the People

CSR: corporate social responsibility

Automotive investment in Central Europe

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Automotive investment in Hungary

Automotive investment in Hungary

RANK

Forbes Global 2000 for Hungary Norway Poland Turkey

COMPANY

COUNTRY

INDUSTRY

525

MOL

Hungary

Oil & Gas Operations

686

OTP Bank

Hungary

Banking

60

StatoilHydro

Norw ay

Oil & Gas Operations Diversified Financials

SALES ($BIL)

PROFITS ($BIL)

ASSETS ($BIL)

MARKET VALUE ($BIL)

15.18

1.73

11.26

13.79

4.09

0.98

37.26

11.34

89

7.52

89.16

98.36

DnB name NOR Can you the biggest companies in your Telenor country?

239

Norw ay

251

Norw ay

13.29

2.52

272.37

19.67

Telecommunicati ons Services

17.01

3.31

29.08

34.79

408

Norsk Hydro

Norw ay

Conglomerates

17.35

1.61

16.93

17.32

493

Orkla

Norw ay

Food Drink & Tobacco

11.75

1.55

17.44

13.1

659

Yara International

Norw ay

Chemicals

10.42

1.11

8.53

16.49

671

PKN Orlen

Poland

Oil & Gas Operations

18.17

0.68

15.56

7.36

735

PKO Bank Polski

Poland

Banking

3.18

0.74

34.8

18.12

926

Pgnig-Polskie Górnictwo Naftowe

Poland

Oil & Gas Operations

5.22

0.45

10.42

11.2

1035

KGHM Polska Miedz

Poland

Materials

4.42

1.21

4.41

9.4

371

Turkey

Banking

12.53

1.26

61.19

12.89

Turkey

Banking

8.17

1.56

61.54

16.26

405

Türkiye Is Bankasi Akbank Türkiye Garanti Bankasi

Turkey

Banking

8.13

1.85

65.48

12.69

639

Koç Group

Turkey

Conglomerates

34.84

0.4

40.12

6.69

690

Sabanci Group

Turkey

Conglomerates

11.95

0.35

47.6

8.27

879

Turkcell

Turkey

Telecommunicati ons Services

4.75

0.9

5.95

22.03

384

Concerns & Disadvantages for Home country Transfer the capital away May cause unemployment By profit interest MNC's may neglect the home countries industrial and economic development.

Concerns & Disadvantages for Host country May transfer outdated technology May pose a threat to the sovereignty May threaten the domestic industry by monopolizing market. May overuse natural resources Money flows to home countries in terms of payments towards profits, dividends and royalty.

Summary: Future of Multinational corporations Expansion according their own interest Bringing benefits and risks Current trend *** Live Together shows continued Market & development of Learn Competition multinational Be aware of Resources corporations their character Employment Technology

Regulate Use

"The future you see is the future you get."

Robert G Allen, Business, Finance & Motivational Author

Any question?