Multinational Corporations

Giuliana Campanelli Andreopoulos & Alexandros Panayides

One of the most important phenomena of the latter half of the 20th century in international business was the emergence of the multinational corporation (MNC). The many different definitions of MNCs usually rest on one of the following common characteristics: (a) company headquarters far removed from the country where the activity occurs, (b) foreign sales representing a high proportion of total sales, and (c) stock ownership and management that are multinational in character. Perhaps the most common definition of a MNC, however, is that it is a company that manages and controls facilities in at least two countries. MNCs diversify their operations along vertical, horizontal, and conglomerate lines within the host and home countries. Vertically integrated MNCs produce intermediate goods in a subsidiary that are later used for the production of final goods in other countries. For example, the General Motors plant in Tonawanda, New York, produces engines to supply ...

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