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business
Asked a question 2 years ago

What are Global Enterprises?

Where am I?

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At some time you must have come

across products produced by Multi

National Corporations (MNCs). In the

last ten years MNCs have played an

important role in the Indian economy.

They have become a common feature

of most developing economies in the

world. MNCs as is evident from what

we see around us, are gigantic

corporations which have their

operations in a number of countries.

They are characterised by their huge

size, large number of products,

advanced technology, marketing

strategies and network of operations all

over the world. Global enterprises thus

are huge industrial organisations which

extend their industrial and marketing

operations through a network of their

branches in several countries. Their

branches are also called Majority

Owned Foreign Affiliates (MOFA). These

enterprises operate in several areasproducing multiple products with their

business strategy extending over a

number of countries. They do not aim

at maximising profits from one or two

products but instead spread their

branches all over. They have an impact

on the international economy also. This

is evident from the fact that the sales of

top 200 corporations were equivalent

to 28.3 percent of the world’s GDP in

1998. This shows that top 200 MNCs

control over a quarter of the world

economy. Therefore, MNCs are in a

position to exercise massive control on

the world economy because of their

capital resources, latest technology and

goodwill. By virtue of this, they are able

to sell any product in different

countries. Some of these corporations

may be slightly exploitative in nature

and concentrate more on selling

consumer goods and luxury items

which are not always desirable for

developing countries.