ChapterSix外文文献.ppt

A. Establishment of foreign subsidiaries Most MNCs are made up of vast numbers of foreign subsidiaries, companies in which over 50 percent is owned by the parent company. Nestle of Switzerland, make over 90 percent of their sales on exports and manufactured goods abroad and control from 50 to 200 foreign subsidiaries with 30 to 90 percent of their sales exported and produced abroad. B.The parent company’s retaining decision-making power Decisions made in an MNC are locally inspired. But major decisions are made by a central management, located in the country of origin of the MNC. So successful MNCs eventually must learn how to interrelate their subsidiaries with the parent company, how to delegate decision-making authority to subsidiaries and how to develop satisfactory methods of control and supervision. C Problems of MNCs how to deal with the different legal and tax structures in the various country so that it can protect its foreign assets. how to secure continued access to resources; how to increase market share in view of foreign competition; how to deal with increased criticism and interference by foreign governments; and how to deal with labor laws and antitrust legislation both at home and abroad. 4. Evolution of Multinational Enterprises Three stages: Export, Foreign production, and Multinational enterprise. 1) Export Stage A company export its products in response positively to this inquiry from a domestic export intermediary or directly from a foreign buyer. The result may be a foreign sale that the manufacturer judges to be profitable. The manufacturer has now evolved toward a systematic export program which is supported by market research, intensive advertising, and other forms of promotion. The manufacturer may be selling full product lines in scores of foreign markets, and export sales may be 10 percent or more of total company sales. But export operations are still entirely depended upon to penetrate foreign markets. 2) Foreign Prod