Indian multinational companies: Evolution and challenges ahead

Abstract

Multinational corporations are big conglomerates,ventured into various diversified sectors. Each production unit of the firm can be looked as strategic business unit . Integration across all these strategic business units grants the firm an integrated diversity. This in turn helps firm to achieve synergy. Multinational corporations are by-product of evolution of businesses in colonial economies. Industrial revolution in European economies can be termed as a pre-cursor to the phenomenon of “Multi-national Corporation”. Industrial revolution created a demand for goods and this incentivized the manufacturing firms to invest in the businesses aggressively. Firm owners couldn’t accumulate the required capital on their own and thus the transition from “SoleProprietorship” to “Partnership” began. This ultimately led to emergence of corporations with numerous stakeholders who invest and expect returns from the economic activity of the firm. Changing circumstances across political and historical contours led to expansion of these firms into other geographical areas. Exploitation of resources in other geographical areas by such firms led to increase in capital flows and there by further accelerated their economic activities. Positions of such colonial powers got solidified by the end of Second world-war.