FeaturesThe corporations have discrete features which distinguish them from other private sector companies, public sector companies and public sector enterprises. They are as follows:
Huge capital resources: The characteristics of these enterprises are that they possess massive financial resources and the capability to raise funds from different sources. They tap funds from different sources. They can issue equity shares, debentures or bonds to the public. They too are in a position to borrow from financial institutions and international banks. They enjoy reliability in the capital market. Hence, investors and banks of the host country are prepared to invest in them. Due to their financial strength they are able to survive under all situations.
Foreign collaboration: Global enterprises habitually enter into agreements with Indian companies with respect to the sale of technology, production of goods, use of brand names for the final products, etc. These MNCs can work together with companies in the public and private sector. There are generally several restrictive clauses in the agreement involving transfer of technology, pricing, dividend payments, tight control by foreign technicians, etc. Large industrial houses willing to diversify and extend have gained by working together with MNCs in terms of patents, resources, foreign exchange etc. But simultaneously these foreign collaborations have paved way to the growth of monopolies and vesting of power in few hands.
Advanced technology: With the advancement in technology, these enterprises have technological superiorities in their methods of production. They are able to be conventional to the international standards and quality specifications. As a result, industrial growth of the country in which such corporations function as they are able to optimally exploit local resources and raw materials.
Product innovation: These enterprises possess highly sophisticated research and development units engaged in the task of developing new products and advanced designs of existing products. Qualitative research needs huge investments that are affordable only for global enterprises.
Marketing strategies: Global companies implement marketing strategies that are more effective than other companies in order to increase the output within a short period. They have a very reliable and up-to-date market information system. The advertising and sales promotion techniques of global companies are generally very effective as they have already carved out a place for them in the global market more so, their brands are well-known and selling their products is quite easy
Expansion of market territory: Their functions and activities are stretched beyond the physical boundaries of their own countries. The international image also mounts up and the market territory grows enabling them to become international brands. They function through a network of subsidiaries, branches and affiliates in host countries. Because of the giant size they occupy a foremost position in the market.
Centralised control: Their headquaters is in their home country and exercise control over all the branches and their subsidiaries. Nevertheless, this control is limited to the extensive policy framework of the parent company. There is no interference in day-to-day functions.