Multinational Corporations

What in the World?

A firm that operates in more than one country

Headquarters in one country and branch plants in several other countries

Ie. Microsoft Canada - Software, services and solutions. Motorola Canada - Wireless hardware products. Primus Telecommunications Canada - Voice,

data/Internet and VoIP solutions. Xerox Canada - Document imaging equipment.

Why?

Improve profitability Access to cheaper raw materials &

labour = lower operating costs Tax concessions or development

grants Geographic diversification

- market & political instability (country A) =

market & political instability (country B)

Always a benefit?

Wealth and mobility = strong political influence in host country

Strict environmental laws = 1. Shut down & move 2. Political pressure to change

laws/special exemptions

Definitions

Outsourcing - business obtains services or products used in manufacturing from an outside (often overseas) supplier or manufacturer in order to cut costs.

Ie?

Definitions cont.

Push Production - manufacturers of products decide what to produce, how much to produce and the price of the product.

Pull Production - retailers determine what the manufacturer will produce, how much to produce and the price of the product.