MNC vs Global Company
When man created a way of communication to deal with each other during the early times, trade was also developed. It started with the barter of goods and services; exchanging what they have in excess for those things that they need but don’t have. When the population grew, and with man’s invention of the things necessary for his existence, money was invented which made trading more efficient. With this came the expansion of trade from being between people in the same place to trading with people from other places as well.
Today, the world is one global market where companies from certain countries have offices and production plants in other countries. These companies are referred to as multinational corporations and as global companies.
A multinational corporation or company (MNC) is an enterprise or corporation which is involved in the manufacture of goods and services in two or more countries. It is also known as an international corporation or company. Its headquarters is located in a certain country which is called its home country, and it has offices in several other countries called the host countries where it also operates. It must adhere to the policies of the host countries and adapt its products to cater to the needs of the host countries.
MNCs play very significant roles in international relations, trade, and in globalization. They are usually companies that have already made a name in the market for their particular product and are equipped with a huge financial capability to expand to other countries. An example of an MNC is Adidas.
Countries which are open to globalization welcome MNCs with open arms, offering them with tax breaks and other incentives in return for the revenues that they can inject into the host country’s economy as well as the employment prospects of its people.
A global company or corporation, on the other hand, is an enterprise or company which is also involved in trade relations with other countries. Unlike MNCs, global companies do not have official headquarters, and they are composed of autonomous units which are parts of one parent or global company. Each unit in a certain area or country handles their individual concerns, and the parent company handles concerns which involve the overall global company. Like MNCs, they hire the local workforce, but they usually pay local workers a higher salary.
Global companies sell the same products or services in every market using the same image and maintaining the characteristics that their company’s products are popular of. An example of a global company is McDonald’s which has stores in most parts of the world.
Summary:
1.A multinational corporation, or MNC, is a company which produces goods and services and has offices in several other countries while a global corporation or company is a company which also has trade relations with several other countries.
2.MNCs usually pay local workers a lower salary rate than global companies.
3.MNCs have official headquarters while global companies do not.
4.Global companies sell the same product with their characteristic image while MNCs adapt their products to the needs of the host countries.