Monday, January 17, 2011

What business activities entitle a company to be "multinational"?

What kinds of business activities entitle a company to be called "multinational"? 

The label multinational is a broad designation given to companies that engage in business functions beyond their domestic borders. This definition encompasses both companies large and small. A multinational company will engage in certain business activities that distinguish from a purely national company. Yet with the increasing impact of globalization many companies are finding themselves faced with situations that only multinational faced before.

An obvious example of a business activity that a multi-national company would be engaged in is international sales. The largest US companies such as Exxon and Wal Mart are seeing international sales account for a larger percentage of total revenue. A multinational company might also purchase supplies from abroad or have manufacturing facilities located in a foreign country.

This has been a popular option with US garment manufacturers in efforts to reduce labor and supply costs. These are only a few examples of business activities that multinationals are engaged in, in the future it is predicted that more and more domestic companies will face similar situations.

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