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Goals of MNC - International Business Methods

The document discusses the goals, constraints, theories, and methods of multinational corporations conducting international business. The goals of MNCs are to maximize shareholder wealth through centralized or decentralized management while reducing agency problems. They face environmental, regulatory, and ethical constraints in meeting these goals. Theories discussed include comparative cost advantage and imperfect markets. Methods for international business include trade, licensing, franchising, joint ventures, acquisitions, and establishing foreign subsidiaries.

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Rohit Kumar Yadav
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1K views8 pages

Goals of MNC - International Business Methods

The document discusses the goals, constraints, theories, and methods of multinational corporations conducting international business. The goals of MNCs are to maximize shareholder wealth through centralized or decentralized management while reducing agency problems. They face environmental, regulatory, and ethical constraints in meeting these goals. Theories discussed include comparative cost advantage and imperfect markets. Methods for international business include trade, licensing, franchising, joint ventures, acquisitions, and establishing foreign subsidiaries.

Uploaded by

Rohit Kumar Yadav
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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GOALS OF MNC- INTERNATIONAL BUSINESS METHODS

Prof. Rashmi Narayanswamy

Goals of the MNC


Maximize shareholder wealth
Centralized vs. decentralized

management Corporate control used to reduce agency problems

Constraints encountered in meeting goals


Environmental

Regulatory
Ethical

Theories of International Business


Theories of Comparative Cost

Advantage Imperfect Markets theory Product Cycle theory

International Business Methods


International Trade
Licensing Franchising Joint Ventures Acquisitions of Existing Operations Establishing New Foreign Subsidiaries

International Opportunities
High growth potential

Opportunities in Europe-

- Single European Act (1987) - Removal of Berlin Wall - Inception of the Euro Opportunities in Latin America - NAFTA - GATT Opportunities in Asia

Exposure to International Risk


International business usually increases an MNCs exposure :
to exchange rate movements to foreign economic conditions to political changes

International Opportunities
Opportunities: Higher growth potential Higher investment opportunity set Lower borrowing costs due to more funding sources Result in lower cost of capital and higher returns for projects

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