Mnc & Their Role

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Multinational and their Roles Unit – 1 Unit – 1 Multinational Corporations – An Introduction Structure 1.1 A Brief Historical Background 1.2 Multinational Concept 1.3 Legal Definitions 1.4 MNCs and TNCs 1.5 Exercise Objectives After studying this unit it should be possible to: . Identify the Historical Background of the MNCs. . Identify the meaning of Multinational Corporations. . Identify the differences between Multinational Corporations and Transnational Corporations. . Get the basic idea of the concept of Multinational Corporations. 1.1 A Brief Historical Background Historically transnational trading was conducted by Greek, Phoenician and Mesopotamian merchants. But gradually Europe and the Middle East stepped into feudalism following the fall of the Roman Empire. Consequently trade between feudal lords and the Church’s influence in prohibiting trade with the Muslim States. The commerce established by the later merchant traders of Italy can be considered forerunners of the multinational firms. The Crusades, which started in 1095, caused the city states of Genoa, Venice, Florence and Pisa to flourish since these places served as staging areas and supply depots for the crusades. As a money economy replaced the prevailing barter economy, banks and money lending institutions developed and flourished, leading to active Page No.: 1 Multinational and their Roles Unit – 1 transnational operations. Multinationals, in the form of trading company started in 17th and 18th centuries. The Hudson Bay Co., the East India Co., the French Levant Co., are examples. Export and import houses and commercial and financial institutions emerged and began to flourish. Originally all these transnational entities confined themselves to trading but gradually they started to govern the
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