What is meant by multinational corporation? How are the cultures of these organizations different from local business firms?

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Multinational Corporations are businesses that operate in many nations but have their head offices located elsewhere. The best examples are firms such as Coca-Cola, Mc Donalds, and KFC.

Multinational corporations can simply operate in other nations or they can purchase local firms such as Walmart did in the United Kingdom and as Sony did in Australia buying Mushroom Records.

“Outsourcing” is another strategy of multinational corporations. This allows them to take advantage of low wage rates, the lack of unions, greater access to resources or any other factor that allows them to reduce the costs of manufacture, hence increasing profit margins.

The reason multinational companies operate in other nations is primarily an economic one. The cost of labour is a major factor. The hourly rate in many LEDC’s (Less Economically Developed Countries such as India and Vietnam) can be up to 10 times cheaper. The car manufacturing company Kia used this as a reason to relocate one of its factories...

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