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Class : 11
Unit : Business

Concept of Multinational Company

Ans : When any companies perform their business in two or more countries is known as multinational company. They perform business activities in many countries through their branches, subsidiaries or agents. All the business activities are managed and controlled by the head office of the company which is situated in mother country because the equity capital of the subsidiaries or branches company is contributed by the people of both host and other countries. It involves in mass scale production and distribution of the specific product by using modern science and technology, transportation and communication, facilities to develop business activities at the international level. According to David E. Lidenthal, “Multinational companies are cooperation which have their home in one country but operate and live under the laws and custom of other countries as well.
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