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CERTIFICATE
This is to certify that the project on Multinational
Company(MNCs) in parital fulfillment fot the award of Master
of Commerce Part-I (Accountancy) University of Mumbai
under
the
guIdance
of
Prof.Dr.P.Murngesan
is her original work and does not form any part of the
project undertaken previously.Also its certified that the
project represents the original work on the part of the
candidate
College Seal
Prinicipal
Dr.Mrs. J.K .Phadnis
Internal Examiner
External Exmainer
Prof.Dr.P.Murngesan
ACKNOWLEDGEMENT
With
immense
please
I
presented
Multinational
Company(MNCs) project report on the currirculum of
Master of Commerce Part I(Accountancy). I wish to thank
all the people who have extended their support &
guidance for making this project an enriching experience
for me.
I would like to express my sincere gratitude towards our
project guide Prof.Dr.P.Murngesan for giving proper
direction & helping at every stage of my project .Her
timely co-operation & valuable suggestions helped me to
understand the subjects well & undertake the study in
fulfilling manner
DECLARATION
I undersigned hereby declare that the project report
entitled Multinational Compny submitted by me under the
guidance Prof.Dr.P.Murngesan is parital fulfilled for the
award of Master of CommercePart I (Accoutancy)
University of Mumbai is my original work and does not
from any part of the projects undertalen previously
Table of Contents
1
Introduction
10
11
Conclusion
12
Bibliography
INTRODUCTION
American based multinationals ruled the world, but today, many Japanese, Korean,
European and Indian multinational companies have spread their wings in many
parts of the world. Before entering into any country, at the headquarters of MNCs,
experts from various fields such as political science, economics, commerce
international trade and diplomacy are analyzing the business environment of a
country and advising the top management.
MNCs have been operating in India even prior to Independence, like Singer, Parry,
Philips, Unit- Lever, Proctor and Gamble. They either operated in the form of
subsidiaries or entered into collaboration with Indian companies involving sale of
technology as well as use of foreign brand names for the final products. The entry
of MNCs in India was controlled by existing industrial policy statements, MRTP
Act, and FERA. In the pre-reform period the operations of MNCs in India were
restricted
(2)
a global, centralized corporation
that
acquires cost
advantage through
centralized production wherever cheaper resources are available,
(3)
an
international
company
corporation's technology or R&D, or
that builds on
the parent
The company was founded at Tampere, the Grand Duchy of Finland in 1865 by
Leo Mechelin and Fredrik Idestam. Its Chairman is Risto Siilasmaa and its
President and CEO is Rajeev Suri. Timo Ihamuotila serves as its CFO. In 2014, its
revenue stood at 12.73 billion and its operating income was 1.63 billion. In the
same year, its net income was 1.17 billion and its total asset worth was 21.06
billion. Its total equity for that year was 8.67 billion.
On 11 February 2016, Nokia and IIT-Madras announced a three-year partnership to
explore the possibility of using unlicensed radio spectrum to deliver broadband
connectivity. Nokia Corporation has shown its willingness in funding the project
through its Corporate Social Responsibility research programme for rural
development. Plus, the MNC would provide technological expertise to IIT-Ms
Centre of Excellence for Wireless Technology (CEWiT).
Nestle
Nestle is one of the top names in the world of food and beverages
across the world. Its focus is on providing the very best in
healthful and tasty food segment to its consumers all over at each
and every stage of their lives and at any time they please. It has
been in existence for more than 140 years and operates in at
least 197 countries. In 2014, it earned CHF 91.6 billion in sales. Its
operating income for that year was CHF 10.90 billion and it
earned profits of CHF 10.02 in 2013.
In 2013, its assets were worth CHF 120.44 billion and its total
equity was CHF 64.14 billion. It employed 3,39,000 people in
various capacities in 2014. Its objective is to be the top name in
the world of nutrition, wellness and health. The company was
founded by Henri Nestle, George Page and Charles Page as AngloSwiss Condensed Milk Company in 1866. Its head offices are at
One of the leading global brands in beverages, Coca Cola offers its complete
portfolio of products in India with drinks, energy drinks, juices, tea, packaged
water and coffee. Coca Cola offers more than 3,500 beverages around the world. It
employs 25,000 people for system-related operations in India. It also has 1,50,000
indirect employees. Together with its franchisees, Coca Cola has 56 bottling plants
in India. In addition, it has 21 contract packers that make various products for the
company. In its 35 years of existence in India, Coca Cola has done well financially
and played a major role in the economic growth of India. It has also played a major
role in the innovation that has taken place in the countrys beverage sector.
Coca Cola was founded in 1886. The company was established by Asa Griggs
Candler and Candler and John Pemberton created the beverage. Its head offices are
in Atlanta, Georgia. Muhtar Kent serves as its CEO and Chairman and Ahmet
Bozer is its Executive Vice President. In 2013, its revenues stood at US$ 46.854
billion and its operating income was US$ 10.228 billion. Its net income in the same
year stood at US$ 8.584 billion and its total assets were worth US$ 90.055 billion.
Its total equity stood at US$ 33.44 billion. As of December 2013, the company had
1,30,600 employees.
Procter and Gamble
IBM
revenue of US$ 92.793 billion and its operating income was US$
19.996 billion. Its net income in the same year was US$ 12.023
billion and its total assets were worth US$ 117.53 billion. Its total
equity was worth US$11.868 billion. It has 3,79,592 employees.
PepsiCo
In the same period, its net income was US$ 900 million and the
aggregate worth of its assets was US$ 2.2 billion. In the 2013-14
fiscal, its total equity stood at US$ 4.7 billion. As of March 2015, it
had 32,700 employees.
Sony Corporation
Citigroup
Citigroup is one of the leaders when it comes to financial services and banking. It
was founded on 16 June 1812 and its predecessors were Travelers Group and
Citicorp. Its head offices are in Manhattan, New York. It operates around the
world. Its CEO is Michael L. Corbat and its Chairman is Michael E. ONeill.
In 2014, its revenue was US$ 76.88 billion and its operating
income was US$ 14.36 billion. Its net income in the same year
was US$ 7.31 billion and its total assets were worth US$ 1.89
trillion. Its total equity for that year stood at US$ 210.5 billion. In
the same year, it had 2,43,000 employees.
Characteristics of Multinationals:
MNCs will always look out for opportunities. They carry out risk
analysis, and send their personnel to learn and understand the
business climate. They develop expertise understanding the
culture, politics, economy and legal aspects of the country that
they are planning to enter.The essential element that
distinguishes the true multinational is its commitment to
manufacturing, marketing, developing R&D, and financing
opportunities throughout the world, rather than just thinking of
the domestic situation.
Some of characteristics of MNCs are:
(i) Mode of Transfer:
The MNC has considerable freedom in selecting the financial
channel through which funds or profits or both are moved, e.g.,
patents and trademarks can be sold outright or transferred in
return through contractual binding on royalty payments.Similarly,
the MNC can move profits and cash from one unit to another by
adjusting transfer prices on intercompany sales and purchases of
goods and services. MNCs can use these various channels, singly
or in combination, to transfer funds internationally, depending on
the specific circumstances encountered.
(ii) Value for Money:
By shifting profits from high-tax to low-tax nations, MNCs can
reduce their global tax payments. In addition, they can transfer
funds among their various units, which allow them to circumvents
currency controls and other regulations and to tap previously
inaccessible investment and financing opportunities.
(iii) Flexibility:
Some to the internationally generated claims require a fixed
payment schedule; other can be accelerated or delayed. MNCs
can extend trade credit to their other subsidiaries through open
account terms, say from 90 to 180 days. This give a major
leverage to financial status. In addition, the timing for payment of
fees and royalties may be modified when all parties to the
agreement are related.
others,
by
continually
introducing
new
products
and
companies
take
advantage
of
economics
of
scope.
prime
example
would
be
Gillette,
which
has
in
countries
where
their
clients
have
opened
Country Risk:
1.Strengths Weakness
2.Low Cost
Methods
Control:
of
Reducing
Country
Risk
and
their
own
Government
as
means
of
reducing
Much of the concern about MNCs stems from their size, which can
be formidable. MNCs may impose on their host governments to
the advantages of their own shareholders and the disadvantages
Thus, MNCs have been placed at par with Indian Companies and
would not be subjected to any special restrictions under FERA.
ii.
iii.
iv.
They are mainly profit oriented and have short term focus on
quick profits. National interests and problems are generally
ignored.
v.
vi.
vii.
viii.
ix.
x.
Conclusion
In conclusion, we may say that foreign investment (if it is actually
done) can be an important stimulus to economic and social
development, only so long as the interests of both the MNCs and
the host country coincide.
It has been pointed out that these companies export too little,
that they tend to declare high dividends, that their investments
are concentrated in certain sectors, that they transfer very little
technology.
Bibliography
www.google.com
www.indeed.co.in
www.yourarticlelibrary.com
www.managementparadise.com
1.Honda
2.Aditya Birla
2.HSBC
3. Accenture
3. Huawei
Hutchison Whampoa
4.. Airbus
4. Limited
5. Apple Computer
5. IBM
6. AOL
6. ITC
7. Atari
7. Infosys
8. AXA
8. Ingersoll Rand
9. Bacardi
Barrick Gold
11. Corporation
12. KPMG
13 BASF
.
14
.
Bayer
14. Kyocera
Billabong
15. LG
BMW
Boeing
17. Maxis
Bombardier
18. Microsoft
BP
19. Monsanto
Brantano Footwear
Cadbury
Citigroup
15
.
16
.
17
.
18
.
19
.
20
.
21
.
22
.
23
.
Daimler-Chrysler
24. Nintendo
Dell
25. Nissan
24
.
25
.
Company
26. Nokia
EA
28. Parmalat
Exxon
29. Pepsi Co
Epson
30. Petronas
Fiat
31. Pfizer
Fonterra
32. Philips
27
.
28
.
29
.
30
.
31
.
32
.
33 Ford
.
34
.
General Electric
34. Regus
General Motors
35. Shell
36. Samsung
Halliburton
37. Schlumberger
Hearst Corporation
38. Siemens
35
.
36
.
37
.
38
.
39
.
40 Hindustan Computers
.
Limited
41
.
Hitachi
41. Services
Toshiba
42
.
44
.
44. Company
Videocon
45. Xerox
Vodafone
46. Yahoo!
47. Yakult
45
.
46
.
47
.
Characteristics of Multinationals:
MNCs will always look out for opportunities. They carry out risk analysis, and
send their personnel to learn and understand the business climate. They
develop expertise understanding the culture, politics, economy and legal
aspects of the country that they are planning to enter.
The essential element that distinguishes the true multinational is its
commitment to manufacturing, marketing, developing R&D, and financing
opportunities throughout the world, rather than just thinking of the domestic
situation.
Some of characteristics of MNCs are:
(iii) Flexibility:
Some to the internationally generated claims require a fixed payment
schedule; other can be accelerated or delayed. MNCs can extend trade credit
to their other subsidiaries through open account terms, say from 90 to 180
days. This give a major leverage to financial status. In addition, the timing for
payment of fees and royalties may be modified when all parties to the
agreement are related.
invest in a country rather than licensing and transfer expertise, to ensure the
maintenance of their good name.
ship them. For example, a number of foreign automobile and truck producers
opened plants in the US to avoid restrictions on-selling foreign made cars.
Automobile giants like. Fiat, Volkswagen, Honda and Mazda are entering
different countries not with the products but with technology and money.
Country Risk:
When making over direct investment it is necessary to allow for risk due to
investments being made in a foreign country. Country risk is one of the special
3. Joint Ventures:
Instead of promising shared ownership in future, an alternative technique for
reducing the risk of expropriation is to share ownership with private or official
partners in the host country from the very beginning.
Such shared ownerships, known as joint ventures rely on the reluctance of
local partners, if private, to accept the interference of their own Government
as a means of reducing expropriation.
When the partner is the government itself, the disincentive to expropriation is
concerned over the loss of future investments. Multiple joint ventures in
different countries reduce the risk of expropriation, even if there is no local
participation. If the government of one country does expropriate the business,
it faces the risk of being isolated simultaneously by numerous foreign powers.
involving sale of technology as well as use of foreign brand names for the final
products. The entry of MNCs in India was controlled by existing industrial
policy statements, MRTP Act, and FERA. In the pre-reform period the
operations of MNCs in India were restricted.
(i v) They are mainly profit oriented and have short term focus on
quick profits. National interests and problems are generally
ignored.
(v) They use expatriate management and personnel rather than
competitive Indian Management.
(vi) Though they collect most of the capital from within the
country, they have repatriated huge profits to their mother
country.
(vii) They make no effort to adopt an appropriate technology
suitable to the needs. Moreover, transfer of technology proves
very costly.
(viii) Once an MNC gains foothold in a venture, it tries to increase
its holding in order to become a majority shareholder.
(ix) Further, once financial liberalizations are in place and free
movement is allowed, MNCs can estabilize the economy.
(x) They prefer to participate in the production of mass
consumption and non-essential items.