Wednesday, 16 March 2022

Global enterprises

 Global enterprises refer to a business that is conducted between two and more than two countries. We can see several multinational corporations in the domestic market of the nation. MNCs play a vital role in the development of the nation. There are lot of Multinational Corporations all around the world that show MNCs gigantic corporations which have operations in several countries. MNCs' sizes depend on several factors such as a large number of productions, technology, a network of operations, marketing strategies, branches of MNCs, and many more. Global enterprises are large industrial corporations that expand their branches in several countries. Their branches are known as majority-owned foreign affiliates. The aim of global enterprises is not only to maximize profits from one and two products but also to spread their branches all over the world. It impacts the international economy also. Global enterprises exert 25 percent of the world GDP. They are in a position to exert massive control over the world economy because their resources include capital resources, advanced technology, and goodwill. Here in this guide, we will highlight the global enterprises and will discuss major features of global enterprises.   

Features of the global enterprises

Every corporation has distinct features which make them different from the other public sectors companies and private companies. These are the following features.  

Large capital resources 

These enterprises are reported for possessing huge capital financial resources and they are capable enough to raise funds from different sources. They are allowed to issues equity shares, debentures, bonds, preference shares, and many more to the public. Global enterprises are also raised funds by borrowing from different financial institutions and international banks as well. There are several Investors and banks of the host nation willing to invest in multinational companies. Because of their financial strength, they can survive in the worst circumstances.

Foreign collaborations 

Global enterprises usually enter into a contract with domestic companies for obtaining sales technologies, production of goods, the brand name on the final product, etc. These companies may amalgamate with private companies and public companies also. There are several restrictive clauses in the agreement relating to the share of technologies, pricing, dividend, and many more. Large sizes corporative houses want to diversify and expect gained by collaboration with MNCs in terms of resources, patents, financials, foreign exchange, and goodwill. But at the same time, this collaboration increases the changes of monopolies and concerns of power in a few hands. 

Advance technology

Global enterprises have superiorities in using technology efficiently. They use an effective method of technology in terms of production. Their products can conform to international standards and quality satisfaction. These things lead to industrial growth in which such corporations are operating. But sometimes they exploit the local resources and raw material as well. There are several technological advancements and innovations done by MNCs. 

Production innovation 

These enterprises alsoperforms several research and are having development departments engaged in the task of developing new products and attractive designs of existing products. Generally, good research and innovation required a lot of money and investment which only global enterprises can afford. 

Marking strategies 

The marking strategies of the global enterprises are more effective than domestic companies. They adopt aggressive market strategies for increasing their sales in a short time. They have a good market research team for analyzing the market; it will help them get reliable and up-to-date market information. They use effective advertising and sales promotion techniques for attracting consumers. 

Expansion of market    

Global enterprises are known for their operation and activities to extend beyond the physical boundaries of their own countries. Their international representation also builds up their image and their market territories expand allowing them to become an international brand. They operate their business through a network of branches, subsidiaries, and affiliations of host countries. Since they are giants, they are enjoying a dominant position in the market. 

Centralized control                       

The global enterprises have their headquarters in their home country and exercise control all over the branches and subsidize. They are not able to adopt a broad policy framework for their business. There is no control over the day-to-day operation. 

Role of global enterprises in India

Global enterprises are playing a critical for developing and emerging markets. There are several domestic companies of the developing nations that need international funds and expertise to expand, proper structure, guides, market strategies, and many more. Foreign companies play a vital role in creating jobs, human capital development, and economic growth; improving capital flow, creating a competitive market, and many more. Here I am highlighting some point that shows the role of enterprises in the development of the nation. 

  • Creating jobs for the population is the most obvious advantage of global enterprises. The global will boost the manufacturing and services sectors which results in emerging immense jobs.
  • Global enterprises boost human capital development. Human capital is involved certain skills and knowledge for the competence of the workforce. There are several training and education offers by foreign companies in specific countries. 
  • There are many products completely not sold in the domestic market. In this case, they need to sell in the global market and this gives a boost in the exports of the country. 
  • Entering foreign companies into the domestic market will create more competition and break the domestic monopoly. Healthy competition pushes the firms to continuously enhance their quality of services to the public.      

 

    

     

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