Mnc-Tnc

We tend to read the following terms and think they refer to any company doing business in another country.

• Multinational

• International

• Transnational

• Global

Andrew Hines over at BNET has brief and clear definitions of each of these terms, Get your international business terms right.

Each term is distinct and has a specific meaning which define the scope and degree of interaction with their operations outside of their “home” country.

• International companies are importers and exporters, they have no investment outside of their home country.

• Multinational companies have investment in other countries, but do not have coordinated product offerings in each country. More focused on adapting their products and service to each individual local market.

• Global companies have invested and are present in many countries. They market their products through the use of the same coordinated image/brand in all markets. Generally one corporate office that is responsible for global strategy. Emphasis on volume, cost management and efficiency.

• Transnational companies are much more complex organizations. They have invested in foreign operations, have a central corporate facility but give decision-making, R&D and marketing powers to each individual foreign market

Don’t make the mistake of calling a company global when it’s really just international – or even worse, saying a company is multinational when it’s really transnational! For convenience, it’s common to use the umbrella term international business to describe business activities that extend past the borders of a company’s home country. But international business analysts (like superstar Michael Porter) have a more precise vocabulary to describe varying foreign activities. Here’s a summary list of the important categories:

• International companies have no foreign direct investments (FDI) and make their product or service only in their home country. In other words,...