A multinational company generally has offices and/or factories in different countries and a centralized head office where they coordinate global management. A multinational company (MNC)is a corporate organization that owns or controls the production of goods or services in at least one country other than its home country.
Due to advent of information age and globalization, the traditional hierarchy of the industrial age is rapidly disappearing and new large groups that are spread across the globe are fast emerging. A multinational corporation is a company with headquarters in one country but they operate in many countries. The post Second World War period saw the rapid growth of multinationals in Europe, America and Japan. As the world economy is opening up with a fall in regulatory barriers to foreign investment, better transport and communications, freer capital movements, etc., international companies are finding it easier to invest where they choose to cheaply, and with less risk. With the advent of globalization, companies started expanding to international markets and establishing marketing, manufacturing, or research and development facilities in several foreign countries.
A multinational company generally has offices and/or factories in different countries and a centralized head office where they coordinate global management. A multinational company (MNC)is a corporate organization that owns or controls the production of goods or services in at least one country other than its home country. One of the first multinational business organizations, the East India Company, was established in 1601. After the East India Company, came the Dutch East India Company in 1603, which would become the largest company in the world for nearly 200 years.
Some current examples are big multi national companies like Apple, Google, Amazon, Coca-Cola, Starbucks, IBM, FedEx, Accenture, Samsung or General Electric etc. Nestle and Shell Oil are two examples of European multinational. Most of the largest and most influential companies of the modern age are publicly traded multinational corporations, including Forbes Global 2000 companies.
A conglomerate is a combination of two or more corporations engaged in entirely different businesses that fall under one corporate group, usually involving a parent company and many subsidiaries. Often, a conglomerate is a multi-industry company. Conglomerates are often large and multinational.
Some of the attributes associated with these large multi-national corporations are:
They are dynamic organizations that are constantly changing and evolving, acquiring and merging many companies, opening their offices in all parts of world and operating under the ambit of ever-changing complex organizational structures.
Fundamentally a corporation must be legally domiciled in a particular country and engage in other countries through foreign direct investment and the creation of foreign branches or foreign subsidiaries.
All these large groups have smaller companies within them. The conglomerate may be constituted of different units which may represent separate legal entities constituted in different countries having multiple layers of ownership (which might be added to the group through mergers, acquisitions or could be joint ventures). Multinational corporations can select from a variety of jurisdictions for various subsidiaries, but the ultimate parent company can select a single legal domicile.
Global operations of these corporations are conducted with multiple subsidiaries, branch offices and joint venture partners working together, constantly evolving and changing their legal structures through mergers, acquisitions and takeovers. These subsidiaries and partners are responsible for their own P&L. They have their own Fixed Assets (such as assets held for the purpose of producing or providing goods/services) and their own markets where their own or their other group concern’s products are sold and eventually consolidate with the group.
Multinational corporations may be subject to the laws and regulations of both their domicile and the additional jurisdictions where they are engaged in business. In some cases, the jurisdiction can help to avoid burdensome laws. Corporations can legally engage in tax avoidance through their choice of jurisdiction, but must be careful to avoid illegal tax evasion. These MNCs should comply fully with all statutory and tax laws & regulations around the world and ensure payment of the correct amount of taxes in every country where it operates.
Aside from setting up a private limited company as subsidiary, foreign companies have two other options for entering the foreign market – a Branch Office or a Representative Office. Both are registered locally in the country of operations, follow local procedures, and need to pay official fees for registration.
Business Metrics for Management Reporting
Business metric is a quantifiable measure of an organization's behavior, activities, and performance used to access the status of the targeted business process. Traditionally many metrics were finance based, inwardly focusing on the performance of the organization. Businesses can use various metrics available to monitor, evaluate, and improve their performance across any of the focus areas like sales, sourcing, IT or operations.
Team-Based Organizational Structure
Team-based structure is a relatively new structure that opposes the traditional hierarchical structure and it slowly gaining acceptance in the corporate world. In such a structure, employees come together as team in order to fulfill their tasks that serve a common goal.
What is Accounting & Book Keeping
Accounting is a process designed to capture the economic impact of everyday transactions. Each day, many events and activities occur in an entity, these events and activities are in the normal course of business; however, each of these events may or may not have an economic impact. Events or activities that have an effect on the accounting equation are accounting events.
Divisional Organizational Structures
The divisional structure or product structure consists of self-contained divisions. A division is a collection of functions which produce a product. It also utilizes a plan to compete and operate as a separate business or profit center. Divisional structure is based on external or internal parameters like product /customer segment/ geographical location etc.
A Company (also called corporation) may be understood as an association of persons in which money is contributed by them, to carry on some business or undertaking. Persons who contribute the money are called the shareholders or the members of the company. A corporation is an artificial being, invisible, intangible and existing only in contemplation of law. Being the mere creature of law, it possesses only those properties which the charter of its creation confers upon it.
Record to report (R2R) is a finance and accounting management process that involves collecting, processing, analyzing, validating, organizing, and finally reporting accurate financial data. R2R process provides strategic, financial, and operational feedback on the performance of the organization to inform management and external stakeholders. R2R process also covers the steps involved in preparing and reporting on the overall accounts.
In every journal entry that is recorded, the debits and credits must be equal to ensure that the accounting equation is matched. In this article, we will focus on how to analyze and recorded transactional accounting information by applying the rule of credit and debit. We will also focus on some efficient methods of recording and analyzing transactions.
Reversing Journals are special journals that are automatically reversed after a specified date. A reversing entry is a journal entry to “undo” an adjusting entry. When you create a reversing journal entry it nullifies the accounting impact of the original entry. Reversing entries make it easier to record subsequent transactions by eliminating the need for certain compound entries. See an example of reversing journal entry!
GL - Different Type of Journals
Two basic types of journals exist: general and special. In this article, the learner will understand the meaning of journalizing and the steps required to create a journal entry. This article will also discuss the types of journals and will help you understand general journals & special journals. In the end, we will explain the impact of automated ERPs on the Journalizing Process.
Global Business Services (GBS) Model
Global business services (GBS) is an integrated, scalable, and mature version of the shared services model. Global Business Services Model is a result of shared services maturing and evolving on a global scale. It is represented by the growth and maturity of the Shared services to better service the global corporations they support.
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