Delta is a local example of an MNC. Image credit Nehandaradio.com

Delta is a local example of an MNC. Image credit Nehandaradio.com

ZIMSEC O Level Commerce Notes: Business Organisations: 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.

To access more topics go to the Commerce Notes page.

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