A Company often become involved in international trade by exchanging goods or services with another country-importing raw materials it my need for production or exporting finished product to a foreign market. Establishing these trade relationship it’s the first step in the development of a multinational business.at this stage however,the corporation’s emphasis is still on a domestic market. As trade expands, the corporation dealing’s with company or people outside the “home country” of that corporation increase.
The corporation then begins to view the whoke world as a base for production on marketing operations. The next step in the development of a multinational business is locusing on the world market. The company may establish foreign assembly plant, engage in contrac manufacturing or build a foreign manufacturing company or subsidiary. Therefore a multinational corporatin of company that is primaly based in one country and has production and marketing activity in foreign countries.
Since world war II multinational corporation have grown rapidly. The name and product of many of the multinationals have become whell-known in the world market place: International Bussiness Machines (IBM), royal Dutch Shell, Panasonic, cola-cola, and Volkswagen. Col-cola for example now has operation in more than 180 countries.
A multinational corporation operate in a complex business environment cultural, social, economic, political, and technological system vary from country to country. In order to operate successfully, a multinational company needs a basic understanding and appreciation of the foreign business environment.