1. Managing Transnational Corporations
- Prof. Vikram Tyagi
Prof. Vikram S Tyagi, JKBS

2. Managing Trannational Corporations
Course Introduction
Definition and role in Globalized world
Strategic frame work for managing TNCs
Major issues involved in managing TGCS
Strategy for managing TNCs
Strategy, structure and operations
Pedagogy: PPT, Case Studies; class discussions
Reading references :
1- International Business-The Challenges of Global Competition (Ed. 2009)
-By Donald Ball, Wendell McCulloch, Michael Geringer, Michael Minor
2-International Business- Competing in the Global Marketplace (6th Ed. 2009}
-By Charles Hill & A.K. Jain
3- International Business-Environment and operation (12th Ed. 2010)
-By John Danial, Lee Radebaugh, Daniel Sullivan and Prashant Salvan 
Course facilitators:
1-Harpreet; ;2-Navjot; ; ; Mo:
Mob:
Prof. Vikram S Tyagi, JKBS

3. Managing Transnational Corporations
Method of Evaluation
Class attendance -10 marks
Class participation -10 marks (3 observers)
Group Assignment -20 marks
Mid Term Exam marks
Final Examination -40 Marks
Prof. Vikram S Tyagi, JKBS

4. Managing Tranational Corporations
What are Transnational Corporations
A multinational corporation (MNC) or transnational corporation (TNC), also called multinational enterprise (MNE), is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation.
The International Labour Organization (ILO) has defined an MNC as a corporation that has its management headquarters in one country, known as the home country, and operates in several other countries, known as host countries.
Prof. Vikram S Tyagi, JKBS

5. Why Managing TNCs is different ?
More Complex Environment
All the forces influencing the life and development of the firm
Domestic
Foreign
International
Forces
External Forces (Uncontrollable) – Forces over which management has no direct control
Internal Forces (Controllable) – Forces that management can use to adapt to external forces

6. Why Managing TNCs is different ?
Domestic Environment
All the uncontrollable forces in the home country that surround and influence the firm’s life and development
Foreign Environment
All the uncontrollable forces originating outside the home country that surround and influence the firm
different values
Different political and legal systems
difficult to assess

7. Why Managing TNCs is different ?
International Environment
Interaction between domestic and foreign environmental forces or between sets of foreign environmental forces
Increased difficulty in decision-making
Decision making more complex

8. Why Managing TNCs is different -External Forces contd..
Competitive
Kind, number, location
Distributive
For distributing goods and services
Economic
GNP, unit labor cost, personal consumption expenditure
Socioeconomic
Characteristics of human population
Financial
Interest rates, inflation rates, taxation

9. Why Managing TNCs is different -External Forces
Legal
Laws governing how international firms must operate
Physical
Topography, climate, and natural resources
Political
Forms of government, and international organizations
Sociocultural
Attitudes, beliefs, and opinions
Labor
Skills, attitudes of labor
Technological
Equipment and skills that affect how resources are converted to products

10. Why Managing TNCs is different -Internal Forces
Factors of Production
Capital, raw materials, and people
Activities of the organization
Personnel, finance, production, and marketing

11. Why Managing TNCs is different -Globalization
The shift toward a more integrated and interdependent world economy
Three components:
The globalization of markets
The globalization of production
The globalization of services
Prof. Vikram S Tyagi, JKBS

12. Why Managing TNCs is different -Globalization
Lowering of trade barriers made globalization possible; technology has made it a reality
Since the end of World War II the world has seen advances in
Communication
Information processing
Transportation technology
Prof. Vikram S Tyagi, JKBS

13. Global Institutions by purpose -Affecting TNCs

14. Global Natural Resources and sustainability- Affect TNCs Strategy
Location
Topography -Mountains, desserts, bodies of water
Climate
Sources of Energy
Non-fuel Minerals
Environmental sustainability
Prof. Vikram Tyagi, JKBS

15. Emerging Role of TNCs in world
There is an unprecedented transfer of power from people and their governments to global Institutions whose allegiance is to abstract free-market principle, and whose favoured citizens are soulless corporate entities
Foreign direct investment: at least 75% of world flows come from TNCs
International trade: 67% of all exports are directly related to TNCs through intra firm operations or trade with third parties
Some TNCs are bigger than some countries
Prof. Vikram S Tyagi, JKBS

16. Emerging Role of TNCs in world-10 largest TNCs ($mn) -Nonfinancial
Ranking
Corporation
Home Economy
Foreign Assets
Total Assets 1.
General Electric
United States 2.
Royal Dutch Shell
United Kingdom 3.
Vodafone Group 4. BP 5.
Toyota Motor
Japan 6.
ExxonMobil 7.
Total
France 8.
E.On
Germany 9.
Électricité de France
10.
ArcelorMittal
Luxembourg
Prof. Vikram S Tyagi, JKBS

17. Emerging Role of TNCs in world
Top 50 Financial TNCs
Top 100TNCs from Developing world
Top 50 Financial TNCs ranked by Geographical spread
Prof. Vikram S Tyagi, JKBS

18. Growing Power of Indian TNCs
Some of Mega acquisitions
Acquiring Co Acquired Co Deal in $ bn
Tata Steel (2007) Corus
Vodafone (2007) Hutch Essar 10.9
Bharati Airtel (2010) Zain Africa 10.7
Vedanta (2010) Cairn India
Hindalco (2207) Novelis
ONGC Imperial Energy 2.6
Tata Motors Jaguar/Rover
Jindal Steels El Mutun
United Spirits Whyte&Mackay 1.2
Essar Steel Agloma steels

19. TNCs Management Business Model

20. Next Session Please read case study: Evolution of Strategy at P&G
(c) Dr. Azhar Kazmi 2008

21. Managing Transnational Corporations
- Prof. Vikram Tyagi
Prof. Vikram S Tyagi, JKBS