There are millions of corporates around us, which are still striving to reach their pinnacle. Besides, each corporate has been classified based on its geographic structure. Moreover, they are edified either throughout the globe or within a country. Starting from Apple, Microsoft, Google, McDonald’s, Amazon, to Facebook, and other fast-food chains have completed today’s world efficiently.
TNC vs MNC
The main difference between TNC and MNC is that the MNCs have home companies as well as their subsidiaries. Meanwhile, TNCs don’t have any subsidiaries but companies. In addition to that, one has a centralized management system, while the latter doesn’t.
TNC is the abbreviation of Transnational Company. They are often differentiated from MNC based on their trading with more than one country except for their homeland. International exports, imports, foreign investment, and asset management are the attributes of TNC. TNCs tend to connect with various countries to have good terms in a way for expansion within local representatives.
On the other hand, the Multinational Company is the acronym of MNC. It is the pacemaker for companies in more than one country, including its homeland also. Its key job is the production of goods and services around the nations. MNCs operate as a crucial organization, as it makes good terms with countries outside its homeland too.
Comparison Table Between TNC and MNC
| Parameters of Comparison | TNC | MNC |
| Meaning | Transnational Corporation is a decentralised enterprise that subsumes its production of goods and services, Fx or any investments with more than one country. TNC set its network in developing countries for cheap cost of production. | Multinational Corporations is a centralised company that runs the production of goods, services, investment and management in its home country as well as in other countries. |
| History | TNC incipient in the 16th Century in Western Europe. Later in the 19th Century, TNC emerged widely in the field of industrial capitalism, where burgeon involvement by many companies mainly in the US and Western European nations. | In 1601, the East India Company emerged as Multinational Company-trading goods and services globally. Later in 1603, the Dutch East India Company was twin MNC to the East India Company. |
| Headquarters | TNC Headquarters doesn’t locate in its home country but in some other developing country where production occurs. | MNC main Headquarters located in its home country- where the production of goods began initially. |
| Structure | Transnational corporation follows decentralised structure- the corporation operates in numerous countries where goods and services are produced. | Multinational Corporation is a centralised management structure, where the home country is considered the main headquarters- while operating other countries for production. |
| Examples | A renowned company Nestle is a Transnational company that runs its operations in more than one developing countries. | Microsoft. Coco-Cola, IBM and Apple etc. are the renowned Multinational companies in the world. |
What is TNC?
As earlier mentioned, Transnational companies are decentralized and capable of burgeoning their revenue in contact with local markets rather than having any specific homeland for themselves. Originally, the term TNC was introduced during the eighteenth century around the lands in Western Europe. Back then, East India company has been a prevailing Transnational Company.
Their strategic ideas are much appreciated as they target economically developed countries for commerce in a way to merit cheap labor for better production. Over and above, they are always in economic’s good books, as they can shift their resources as well as operations to any location. Their chief intention is to provide their shareholders with the best profit of their lives.
TNC has been a globally operated corporation whose only jackpot is the dynamic flux of foreign investments around their headquarters. Since they are able to operate their own company, it is not a big deal for them to establish their own decisions alongside local markets. Such companies include Nestle, as most of the profits are contributed by foreign-based factory floors.
Other examples of TNC are McDonald’s, Apple, Starbucks, and you name it, which companies have a globally engrossing contribution with no official motherland.
What is MNC?
MNC is an abbreviated form of Multinational Company. It owns a home company as well as its subsidiaries, unlike TNC, which only owns many companies around the globe. They are counted as the best opportunity among the upcoming job seekers, as it creates an environment with lots of business with top companies. In the abstract, most of the MNC’s jobs include importing-exporting goods and services, investments with foreign-based companies, manufacturing operations, and so on.
Due to emerging globalization, they were often criticized for inequality, unemployment, tax avoidance, and wage stagnation among non-natives. However, they had brought in the best raw materials from abroad to their homeland. Microsoft company is a good example of MNC, as they lend their trade in foreign lands, such as India, with its headquarters in America. Other examples are Coca-Cola, Sony Corporation, IBM, etc.
Main Differences Between TNC and MNC
- TNC operates its production in more than one country other than its primary or home country. Whereas MNC operates its activity in its home country as well as in many countries.
- TNC operates its management structure is decentralized, whereas MNC runs in a centralized management structure.
- TNC was founded in the 16th century at the same time MNC was introduced. But TNC thrived after the 19th and 20th Centuries. On the other hand, MNC emerged in 1601 as the East India Company.
- TNC doesn’t have any specific headquarters and runs operations in various developing countries. Albeit, MNC has its Headquarters in its home country and guides its operations in more than one country.
Conclusion
TNC is a decentralized structure that operates or facilitates the production of goods and services in more than one country and not in its home country. MNC is a centralized management structure that runs its production of investment, services, or management at least in one country along with its home country. TNC and MNC are similar meanings with minutiae differences in their operations of production of goods and services.
References
- https://books.google.co.in/books?hl=en&lr=&id=ztTH_USwrWwC&oi=fnd&pg=PR1&dq=transnational+corporations&ots=UwP7SR5wx1&sig=RYPVXlR9pMlQO9SpYLaDduNaCn4
- https://www.jstor.org/stable/1815843