BB0023 Multinationals & their Roles

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Programme - Bachelor of Business Administration-BBA Semester 5

BB0023 Multinationals & their Roles

(Book ID: B0102)

Assignment (60 Marks)

 Note: Each question carries 10 Marks. Answer all the questions. 

Q1. What is a MNC? Discuss the impact of Foreign Direct Investments in at least two sectors of the Indian economy with examples.

Ans. MNC: An enterprise operating in several countries but managed from one country. Generally, any company or group that derives a quarter of its revenue from operations outside of its home country is considered a multinational corporation.

There are four categories of multinational corporations: (1) a multinational, decentralized corporation with strong home country presence, (2) a global, centralized corporation that acquires cost advantage through centralized production wherever cheaper resources are available, (3) an international company that builds on the parent corporation's technology or R&D, or (4) a transnational enterprise that combines the previous three approaches. According to UN data, some 35,000 companies have direct investment in 

Q2. “The technologies transferred by the MNC to their production units in the underdeveloped countries are appropriate for the latter’s social and economic development needed”. Do you agree or disagree with this statement. Support your answer with relevant examples.

Ans. Technology diffusion in developing nations is dependent on a continuous flow of good training for all users and potential users. Yet relatively little analysis of the results of this training has been done beyond cursory post-course evaluations. Despite the extensive investments in IT training by donors, multilateral organizations and the national governments, the return on investment for these courses and programs is not clear. This study aims to give a more explicit, long term perspective on IT training in developing nations by employing a popular

Q3. Briefly discuss the advantages and disadvantages of MNCs.

Ans. Advantages of MNC's for the home country

MNC's home country has the following advantages.

1. MNC’s create opportunities for marketing the products produced in the home country throughout the world.

2. They create employment

Q4. Write short notes on the following:

(a) FERA: The Foreign Exchange Regulation Act (FERA) was legislation passed by the Indian Parliament in 1973 by the government of Indira Gandhi and came into force with effect from January 1, 1974. FERA imposed stringent regulations on certain kinds of payments, the dealings in foreign exchange and

(b) Obstacles of foreign capital in developing economies: These are a few factors

Political Instability: In most of the developing countries, the governments are not stable. A new government comes into power overnight; either through coup defeat or army takeover. The new government

Q5. Write a brief note on international HRM strategy.

Ans. Concept of International Human Resource Management

Broadly defined, International human resource management is the study and application of all human resource management activities as they impact the process of managing human resources in enterprises in the global environment. IHRM can be explained as "The set of distinct activities, functions and processes that are directed at attracting, developing and maintaining an MNC's human resources. It is the aggregate of the

Q6. Discuss the organizational structures for multinational strategies.

Ans. Multinational companies are faced with two opposing forces when designing the structure of their organization. They are faced with the need for differentiation that allows them to be specialized and competitive in their local markets. They are also faced with the need to integrate. The structures adopted therefore have to find a balance between these opposing needs and also remain in strategic alignment for the company

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