ZIMSEC O Level Commerce Notes: Business Organisations: Multinational Companies
- 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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