Advantages of Multinational CompaniesLászló 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

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

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

Country USD,b

Turkey 822

Poland 526

Norway 513

Romania 190

Hungary 133

Bulgaria 54

Estonia 25

2,263

GDPCOMPANY COUNTRY INDUSTRY

SALES

($BIL)

Wal-Mart StoresUnited

StatesRetailing 378.8

ExxonMobilUnited

States

Oil & Gas

Operations358.6

Royal Dutch Shell NetherlandsOil & Gas

Operations355.8

BPUnited

Kingdom

Oil & Gas

Operations281.0

ChevronUnited

States

Oil & Gas

Operations204.0

Toyota Motor JapanConsumer

Durables203.8

Total FranceOil & Gas

Operations199.7

ING Group Netherlands Insurance 197.9

General MotorsUnited

States

Consumer

Durables181.1

2361

Countries are inviting them to investi.e. a Hungarian leaflet

Billions of EUR foreign investments every year

EUR,bTurkey 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 CulturePowerful 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

?

Automotive investment in Hungary

Automotive investment in Hungary

ForbesGlobal2000for HungaryNorwayPolandTurkey

Can you name the biggest companies in your country?

RANK COMPANY COUNTRY INDUSTRYSALES

($BIL)

PROFITS

($BIL)

ASSETS

($BIL)

MARKET

VALUE

($BIL)

525 MOL HungaryOil & Gas

Operations15.18 1.73 11.26 13.79

686 OTP Bank Hungary Banking 4.09 0.98 37.26 11.34

60 StatoilHydro NorwayOil & Gas

Operations89 7.52 89.16 98.36

239 DnB NOR NorwayDiversif ied

Financials13.29 2.52 272.37 19.67

251 Telenor NorwayTelecommunicati

ons Services17.01 3.31 29.08 34.79

408 Norsk Hydro Norway Conglomerates 17.35 1.61 16.93 17.32

493 Orkla NorwayFood Drink &

Tobacco11.75 1.55 17.44 13.1

659 Yara International Norway Chemicals 10.42 1.11 8.53 16.49

671 PKN Orlen PolandOil & Gas

Operations18.17 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 PolandOil & Gas

Operations5.22 0.45 10.42 11.2

1035 KGHM Polska Miedz Poland Materials 4.42 1.21 4.41 9.4

371 Türkiye Is Bankasi Turkey Banking 12.53 1.26 61.19 12.89

384 Akbank Turkey Banking 8.17 1.56 61.54 16.26

405 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 TurkeyTelecommunicati

ons Services4.75 0.9 5.95 22.03

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

Current trend shows continued development of multinational corporations

Bringing benefits and risks

Market & Competition

Resources

Employment

Technology

*** Live Together

Learn

Be aware of their character

Regulate

Use

"The future you see is the future you get."Robert G Allen, Business, Finance & Motivational Author

Any question?