The subject of assignment at the assignment criteria box Essay

The subject of assignment at the assignment criteria box - Essay ExampleMultinational companies are those companies with branches in several(prenominal) countries. A multinational telephoner is a main company that produces in foreign countries through its branches or partners situated in several countries. The policies of the branches and partners are directly controlled by the parent company which sets strategies for all the activities of the company that go beyond the boundaries of the boniface countries. These include product marketing, personnel, financial matters as well as production strategies. The policies whitethorn have server commonwealth orientation or parent country orientation (Feldman, 2008, pp.22-27). A multinational company may be owned by citizens of one, two countries or more.In another situation, a company may establish branches in antithetical countries in edict to reduce the cost of transporting raw materials in order to reduce the final cost of the prod ucts that is added to the consumer price.A company may withal establish branches in countries that minute its products in order to escape import tax that may be enforced by the merchandise country against foreign companies. An example of this is when external levy was enforced against outsiders by the European Community, companies from the United States in use(p) in Foreign Direct Investment in order to evade these tariffs (Howard Perlmutter, 1969).Fluctuating exchange range are also a factor that leads to the establishment of multinational companies in order to avoid losses that are associated with these rates. This phenomenon arises when companies produce at a high comfort of the local currency and then the value falls during exportation. They opt to establish a subsidiary industry in the importing country.Competition is also a factor that gives rise to multinational companies. A company X in one country may be producing the same products as another company Y in a different country, both competing for a