A multinational corporation (MNC) or multinational enterprise[1] is an organization that owns or controls production of goods or services in one or more countries other than their home country.[2] It can also be referred as an international corporation, a "transnational corporation", or a stateless corporation.
The actions of multinational corporations are strongly supported by economic liberalism and free market system in a globalized international society. According to the economic realist view, individuals act in rational ways to maximize their self-interest and therefore, when individuals act rationally, markets are created and they function best in free market system where there is little government interference. As a result, international wealth is maximized with free exchange of goods and services.[8]
To many economic liberals, multinational corporations are the vanguard of the liberal order.[8] They are the embodiment par excellence of the liberal ideal of an interdependent world economy. They have taken the integration of national economies beyond trade and money to the internationalization of production. For the first time in history, production, marketing, and investment are being organized on a global scale rather than in terms of isolated national economies.[9]
A transnational corporation differs from a traditional multinational corporation in that it does not identify itself with one national home. While traditional multinational corporations are national companies with foreign subsidiaries,[10] transnational corporations spread out their operations in many countries to sustain high levels of local responsiveness.[11]
An example of a transnational corporation is Nestlé who employ senior executives from many countries and try to make decisions from a global perspective rather than from one centralized headquarters.[12]
Another example is Royal Dutch Shell, whose headquarters are in The Hague, Netherlands, but whose registered office...