Multinational Companies

Features

• Also known as Trans-national companies.
• They are found in the private sector.
• They are large limited liability businesses which have:
• subsidiaries operating in other countries.
• Headquarters in one parent country.
• Subsidiaries are managed by local board of directors in each of these countries.
• Subsidiaries pay a royalty fee for the use of a design or formula.
• The royalty is paid based on the number of units sold.
• Subsidiary manufactures are licenced to produce goods which adhere to the specified original design.
• They have large amounts of capital.
• Bring advanced technology/machinery to the host countries.
• The subsidiaries remit back some of the profits to the parent company.
• There is centralised control at the headquarters.

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