Midterm Question # 1

1. Identify the benefits and disadvantages of MNC's.

Answer:

A multinational corporation (MNC) or transnational corporation (TNC), also called multinational enterprise (MNE), is a corporation or enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation.

The first modern MNC is generally thought to be the British East India Company, established in 1600. Very large multinationals have budgets that exceed some national GDPs. Multinational corporations can have a powerful influence in local economies as well as the world economy and play an important role in international relations and globalization.

Multinational corporations have unique needs when managing their international employee populations. In addition to a worldwide benefits solution, they need the flexibility to provide their international employees with benefits similar to those offered to their U.S.-based employees.

2. Identify one MNC company and describe its operation.

Answer:

The East India Company (also the East India Trading Company, English East India Company, and then the British East India Company) was an early English joint-stock company that was formed initially for pursuing trade with the East Indies, but that ended up trading with the Indian subcontinent and China. The oldest among several similarly formed European East India Companies, the Company was granted an English Royal Charter, under the name Governor and Company of Merchants of London Trading into the East Indies, by Elizabeth I on 31 December 1600. After a rival English company challenged its monopoly in the late 17th century, the two companies were merged in 1708 to form the United Company of Merchants of England Trading to the East Indies, commonly styled the Honourable East India Company,and abbreviated, HEIC; the Company was colloquially referred to as John Company, and in India as Company Bahadur (Hindustani bahādur, "brave").

The East India Company traded mainly in cotton, silk, indigo dye, saltpetre, tea, and opium. However, it also came to rule large swathes of India, exercising military power and assuming administrative functions, to the exclusion, gradually, of its commercial pursuits. Company rule in India, which effectively began in 1757 after the Battle of Plassey, lasted until 1858, when, following the events of the Indian Rebellion of 1857, and under the Government of India Act 1858, the British Crown assumed direct administration of India in the new British Raj. The Company itself was finally dissolved on 1 January 1874, as a result of the East India Stock Dividend Redemption Act.

3. Describe how the parent control/coordinates with its subsidiaries in other countries or region.




4. How is IT maximized or used by this MNC?

Answer:

The Information Center can be used as a strategic tool in an international, multinational or global organization by promoting the effective application of information technology to international business problems. It is important to note that the IS strategies may vary among the various divisions of the organization and between the organization and it's formal associations external to the company, i.e., strategic alliances, joint ventures, technology transfers. The data needs and the analysis of data may vary considerably between foreign wholly-owned subsidiaries, joint ventures and strategic alliances. Therefore, the IS strategy must also be flexible enough to service the needs of the division/relationship being fulfilled by the data expertise of Information Center personnel.

Four relationships between the Information Center and functional divisions/management can be identified (see Table 2). (Table 2 omitted) (1) Contractor Role--IS negotiates agreements for services and service levels needed by various functional customers within the company. The services are provided by IS or by outside suppliers identified/qualified by the technical experts in the Information Center. (2) Utility Role--IS provides reliable data in a standardized format. The user is responsible for all custom application systems (Hopper, 1990). In addition, any contextual, environment issues that need local data to be used is the responsibility of the foreign operational personnel. (3) Vendor Role--IS has evolved to a level that their expertise in international problems allows them to recommend new solutions for international line manager's problems. This IS approach provides technological innovation and systems innovation but allows both IS and the international manager full responsibility for their own parts of the problem (Quinn and Paquette, 1990). (4) Partner Role--The IS organization is sufficient decentralized globally to participate fully in major decision with the foreign subsidiary line managers. This strategy requires a high level of mutual understanding and acceptance that frequently is not present

In many multinational corporations (MNCs) the dissimilarity between the Information Services (IS) department and the remainder of the corporation is so distinct that the IS function is managed as a separate strategic business unit. Powerful departmental and personal computing systems, flexible languages and application packages, and the inexpensive networks have effectively eliminated the monopoly that the IS profession once had on the control and use of computerized data. The functional managers around the world have become customers with options beyond those offered by more traditionally organized IS departments. In the global environment, it is important that IS department manage the interface with domestic and foreign divisions of the MNC with the same attention that it would give an external customer (Benjamin and Levinson, 1993).

5. WHat were the weaknesses/problems encountered by this MNC from its environment and global setup?

Answer:

Specific problems encountered by multinational corporation. Topics include investment decisions, environmental scanning, planning and control, and the social responsibilities of firms in host nations. 3 credit hours.


Reference:

http://en.wikipedia.org/wiki/Multinational_corporation

http://www.aetnaglobalbenefits.com/employers/multi/index.html
http://en.wikipedia.org/wiki/British_East_India_Company
http://www.newhaven.edu/academics/130/


DIPAY, IVY MAE J.