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Multinational Corporations

Definition

Multinational corporations are large companies that operate in multiple countries, with headquarters in one country and branches or subsidiaries in others. They engage in business activities such as production, sales, and distribution on a global scale.

Analogy

Think of multinational corporations as global superstars who have fans all around the world. Just like how these superstars have concerts in different countries and interact with fans from various cultures, multinational corporations establish their presence globally to reach customers from diverse backgrounds.

Related terms

Globalization: Globalization refers to the increasing interconnectedness and integration of economies, societies, and cultures worldwide. It involves the exchange of goods, services, information, and ideas across national borders.

Foreign Direct Investment (FDI): FDI is when a company invests directly in a foreign country by establishing operations or acquiring assets there. It allows multinational corporations to expand their business activities beyond their home country.

Outsourcing: Outsourcing is when a company delegates certain tasks or functions to external contractors or third-party organizations located abroad. Multinational corporations often outsource non-core activities to take advantage of lower costs or specialized expertise available elsewhere.