Q.Why are global enterprises considered superior to other business organisations?

Global enterprises (MNCs) are seen as superior because of their distinctive strengths:

• Huge capital resources — vast funds from many sources; they survive under all circumstances.
• Foreign collaboration — technology and brand-name agreements with local companies.
• Advanced technology — meet international standards and quality.
• Product innovation — sophisticated R&D develops new products.
• Marketing strategies — aggressive, information-driven marketing with well-known brands.
• Expansion of market territory — operate across countries as international brands. …

Multinational Corporations (MNCs), or global enterprises, are gigantic corporations operating in a number of countries, marked by their huge size, many products, advanced technology, marketing strategies and worldwide network. A global enterprise extends its industrial and marketing operations through a network of branches in several countries, producing multiple products across many nations. What makes them considered superior to other business organisations is the following set of features:

• (i) Huge capital resources: they possess enormous financial resources and can raise funds from many sources — issuing equity shares, debentures or bonds and borrowing from financial institutions and international banks. They enjoy such credibility that even investors and banks of the host country invest in them, and this financial strength lets them survive under all circumstances.

• (ii) Foreign collaboration: they enter agreements with local companies covering sale of technology, production of goods, use of brand names and more, collaborating with both public and private companies. Big Indian houses have gained patents, resources and foreign exchange through such collaboration (though this can also foster monopoly).

• (iii) Advanced technology: they enjoy technological superiority, meeting international standards and quality specifications. This aids the host country's industrial progress by optimally exploiting local resources and raw materials.

• (iv) Product innovation: they have highly sophisticated research and development (R&D) departments that create new products and superior designs — qualitative research needing huge investment only global enterprises can afford.

• (v) Marketing strategies: their marketing is far more effective — aggressive selling, a reliable, up-to-date market information system, and strong advertising and sales promotion. Because their brands are already well known globally, selling is not a problem. …