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Multinational companies

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Multinational companies

A multinational corporation (MNC) or multinational enterprise (MNE)[1] is a corporation that is registered in more than one country or that has operations in more than one country. It is a large corporation which both produces and sells goods or services in various countries.[2] It can also be referred to as an international corporation.

They play an important role in globalization. Arguably, the first multinational business organization was the Knights Templar, founded in 1120.[3][4][5] After that came the British East India Company in 1600[6] and then the Dutch East India Company, founded March 20, 1602, which would become the largest company in the world for nearly 200 years.[7]

Strategies

A corporation may choose to locate in a which is a geographical region that has economic and other laws that are more free-market-oriented than a country's typical or national laws. It could also choose a more rationalized decision and run with the money.

Conflict of laws

Main article: Conflict of laws

Conflict of laws is a set of procedural rules that determines which legal system and which jurisdiction's applies to a given dispute.

The term conflict of laws itself originates from situations where the ultimate outcome of a legal dispute depended upon which law applied, and the common law courts manner of resolving the conflict between those laws. In civil law, lawyers and legal scholars refer to conflict of laws as private international law. Private international law has no real connection with public international law, and is instead a feature of local law which varies from country to country.

The three branches of conflict of laws are:

  • Jurisdiction – whether the forum court has the power to resolve the dispute at hand
  • Choice of law – the law which is being applied to resolve the dispute
  • Foreign judgments – the ability to recognize and enforce a judgment from an external forum within the jurisdiction of the adjudicating forum.
  • it is sometimes against government policies.

Transnational corporations

A transnational corporation (TNC) differs from a traditional MNC in that it does not identify itself with one national home. While traditional MNCs are national companies with foreign subsidiaries,[8] TNCs spread out their operations in many countries sustaining high levels of local responsiveness.[9] An example of a TNC is Nestlé who employ senior executives from many countries and try to make decisions from a global perspective rather than from one centralized headquarters.[10]

Criticism of multinationals

Main articles: Anti-globalization and Anti-corporate activism

Anti-corporate advocates criticize multinational corporations for entering countries that have low human rights or environmental standards.[11] They claim that multinationals give rise to huge merged conglomerations that reduce competition and free enterprise, raise capital in host countries but export the profits, exploit countries for their natural resources, limit workers' wages, erode traditional cultures, and challenge national sovereignty.[according to whom?]

See also

References

External links

  • Data on transnational corporations
  • UNCTAD publications on multinational corporations

Template:Aspects of capitalism

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