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International Business

Submitted by:-

Group (8)
MBA (B2)
Ahmad Nadeem Shahid
Shumaila Asnath
Sadaf Jabeen
Yusra Younas
Asad Ali Khan

Submitted To:-

Multinational Corporation

Multinational Corporation (MNC) is a corporation or enterprise that manages

production or delivers services in more than one country. The first modern MNC is
generally thought to be the Dutch East India Company, established in 1602. Very large
multinationals have budgets that exceed some national GDPs. Multinational corporations
can have a powerful influence in local economies as well as the world economy.
Multinational corporations play an important role in international relations and
globalization. In Pakistan there are 165 companies out of which there are 47
multinational companies

Total MNCs working in Pakistan

• AAB Chartered
• Unilever
• Proctor & Gamble
• Nestle
• Chartered Bank
• Siemens
• Toyota
• Pepsi Cola International
• Mobilink
• Citigroup
• Coca cola
• Gillette
• Honda
• Nestle
• Shell
• Sony
• Toyota
• Toshiba
• Samsung
• LG
• Nissan
• Orascom
• Philips
• Mc Donald
• Microsoft
• Mother care
• Al-Falah Bank
• Royal Bank Of Scotland
• Standard Charter Bank
• Pak al Saudi Bank
• Crescent Commercial Bank
• Hinopak Motors
• Suzuki
• Nissan
• Murree Brewery
• Colgate-Palmolive Pakistan
• Pizza Hut
• Novartis
• Aventis
• Warid Telecom
• Telenor
• Wateen Telecom
• China Mobile
• Mod
• Reebok


• Toyota
• Honda
• Nissan
• Hinopak Motors

• Philips
• Hawaii
• Samsung
• LG
• Sony
• Toshiba
• Intel


• Citibank
• Al-Falah Bank
• Royal Bank Of Scotland
• Standard Charter Bank
• Pak al Saudi Bank
• Crescent Commercial Bank
• Dubai Islamic Bank

Telecommunication and IT

• Mobilink
• Warid Telecom
• Telenor
• Wateen Telecom
• China Mobile

Food and personal care products

• Murree Brewery
• Procter & Gamble
• Unilever Pakistan
• McDonald
• Pizza Hut
• Pepsi
• Coca-Cola
• Nestle Pakistan

• Colgate-Palmolive Pakistan
• ICI Pakistan


• Siemens


• Novartis
• Aventis


• Mod
• Reebok

Top Ten MNCs in Pakistan

1. Unilever

2. Proctor & Gamble

3. Nestle

4. Chartered Bank

5. Siemens

6. KFC

7. Toyota

8. Pepsi Cola International

9. Mobilink


Unilever Pakistan LTD

The modern Unilever was established in 1929 as an association between the British
manufacturer Lever Bros. and several other European soap and margarine
manufacturers. Today most Unilever sales are in household products, including soaps
and detergents, margarines, cooking fats, dairy products, toiletries, and packaged and
processed foods. The group also produces paper and plastic products, industrial
chemicals, and animal feeds.

Unilever in Pakistan

The Unilever Pakistan Limited (UPL), formerly Lever Brothers Pakistan Limited was
established in Pakistan in 1958. The town of Rahimyar Khan was the site chosen for
setting up a vegetable oil factory. Unilever Pakistan is the largest FMCG company in
Pakistan, as well as one of the largest multinationals operating in the country. Now
operating six factories at different locations around the country. The Unilever's Head
Office was shifted to Karachi from the Rahimyar Khan site in the mid 60's.

Unilever Brands in Pakistan

• Blue Band
• Supreme Tea
• Clear Shampoo
• Close Up
• Comfort
• Fair & Lovely
• Lifebuoy soap & shampoo
• Lipton
• Lux
• Ponds
• Rexona
• Sunsilk
• Surf Excel
• Wall’s
• Wheel

Operations of Unilever:

160 million times a day, someone somewhere chooses a Unilever product. From
feeding your family to keeping your Since the time Unilever Pakistan began its
operations in 1948, the Company has been closely connected to the Pakistani people
and its brands have been an integral feature in their daily lives. In fact, the nature of
our business enables our brands to be the pulse and heartbeat of the 164 million
people in Pakistan. This is a huge commitment, which makes us responsible and
accountable to all our stakeholders and society as a whole and strengthens our resolve
to: Make a positive difference to the lives of low income consumers Create new
opportunities for growth Improve the overall quality of life in Pakistan, by promoting
education, nutrition, health and hygiene. home clean and fresh, our brands are part of
everyday life.

• Food brands
• Home care brands
• Personal care brands
• Nutrition
• Health, hygiene & beauty
• Our advertising
• Unilever Food solutions

Unilever Pakistan (70.4% Unilever equity) is the largest FMCG Company in

Pakistan, as well as one of the largest multinationals operating in the country
Procter & Gamble


William Procter, a candle maker, and James Gamble, a soap maker, formed distinct
companies. The two men, immigrants from England and Ireland respectively who had
settled earlier in Cincinnati, might never have met, had they not married sisters,
Olivia and Elizabeth Norris. Since both their industries used similar resources, the
Panic of 1837 caused intense competition between the two and as a result it led to
discord with the family. Alexander Norris, their father-in law decided to call a
meeting where he convinced his new sons-in-law to become business partners. On
October 31, 1837, as a result of the suggestion, a new enterprise was born. Procter &
Gamble. Procter & Gamble headquarters in Cincinnati, Ohio.

History in Pakistan

Procter & Gamble Pakistan, headquartered in Karachi, commenced operations in

Pakistan in 1991. Our goal was to become the finest global consumer goods company
operating locally in Pakistan. To fulfill this goal, we are serving Pakistani consumers
with 12 high-quality brands locally that strive to make everyday lives better.

P&G Pakistan headquarters are consistently upgraded to the company's progressive
values. Investments of $1 million and a recent $600,000 investment have taken place
in the work-space environment to date. The P&G Pakistan head office today hosts
high-speed digital networks and advanced systems and facilities.

As a company with vast global experience, P&G always has believed in the potential
Pakistan has as a country. Since 1989, the total amount invested by P&G Pakistan in
assets, working capital and market development has exceeded Rs 6 billion. In
addition, Procter & Gamble contributed Rs 3.1 billion to the national exchequer in the
form of taxes and duties during 2005 and 2006, increasing 13 percent over the
previous year.

P&G has attracted outstanding individuals since the day it began operations in
Pakistan. The company employs more than 257 people and creates more than 4,000
jobs indirectly in Pakistan, 99 percent of which are held by Pakistanis. All this makes
P&G a more locally focused company.

• Beauty Care
• Beauty segment
• Grooming segment
• Household Care
• Baby Care and Family Care segment
• Fabric Care and Home Care segment
• Health & Well-Being
• Health Care
• Snacks, Coffee and Pet Care

Procter & Gamble brands.

• Ariel
• Actonel.
• Bounty
• Braun
• Crest
• Dawn.
• Downy/Lenor
• Duracell
• Gain.
• Gillette
• Head & Shoulders
• High Endurance
• Ivory
• Nice 'n Easy
• Olay.
• Oral-B.
• Pampers
• Pantene
• Prilosec OTC
• Pringles.
• Puffs
• Secret
• Tide
• Vicks
• Whisper
• pany.
Nestle Pakistan LTD


Nestlé with headquarters in Vevey, Switzerland was founded in 1866 by Henri Nestlé and
is today the world's biggest food and beverage company. The Company's strategy is
guided by several fundamental principles. Nestlé's existing products grow through
innovation and renovation while maintaining a balance in geographic activities and
product lines.

The company succeeded in achieving sustainable profitable growth during the year under
the view driven by successful marketing and sales strategies and focus on key initiatives.
Consumer confidence in the company’s brand has further strengthened and the trade
remains confident as ever in doing business with it. Innovation and renovation remained
the key to development of new products. Food services business unit is fast developing
the required skill and competencies to meet specialized needs of out-of –home customers
and hope that the organization structure will be more strengthened in the coming
years.This is changed 12% i.e. last year. 22.62% as per share. Over all company market
share is 80%. Nestlé share as compared to nurpur, nirala and other are moves around 20
to 30%.Total turnover:- 12.9 Billion Rupees

Nestle Deal in:

• Baby Foods
• Breakfast Cereals
• Beverages
• Bottled Water
• Chocolate & Confectionery
• Dairy Products
• Food Services
• Ice Cream
• Prepared Foods
• Petcare
• Cosmetics

NESTLE Brands:

• Infant nutrition Nestlé,

• Lactogen,
• Nestogen,
• Cerelac,
• Neslac,
• PowerBar,
• Pria etc..
• Coffee Nescafé
• Nestlé fruit juices
• Nestlé Pure Life
• Nestlé Aquarel etc..
• Chocolate confectionery and biscuits
• Nestlé
• Crunch
• Galak/Milkybar
• Kit Kat
• Smarties
• Butterfinger
• Aero
• Polo
• Nido
• Nespray
• Carnation
• La Lechera etc..

Nestle Operations:

Nestlé MilkPak Limited (NML) was incorporated in Pakistan under the Companies
Ordinance, 1984 & listed on Karachi and Lahore stock exchanges since 1980. Joint
venture between Nestle Switzerland and MilkPak Limited came about in 1988.Nestle
always make sure that all of its operations are convenient and easily accessible to its
target market. Product handling is responsibility of company. Quality and nutritional
value are the essential ingredients in all of its brands. Nestle has two factories in Pakistan
for the production of different food items. One in Sheikhupura near Lahore and other in
Kabirwala near Multan


Pakistan Mobile Communications Limited, better known as Mobilink GSM, is

a telecommunication service provider in Pakistan. Mobilink offers exclusively designed
tariff plans that cater to the communication needs of a diverse group of people, from
individuals to businessmen to corporate and multinationals. Mobilink started operations
in 1994 as the first GSM cellular Mobile service in Pakistan by MOTOROLA
Inc.,[citation needed] later it was sold to Orascom, an Egypt-based multi-national
company.Mobilink has 31.75 million customers by March 2008. Mobilink's Head office
is located in Mobilink House, 1 A Kohistan Road, F-8 Markaz Islamabad.
Mobilink has become the market leader both in terms of growth as well as having the
largest customer subscriber base in Pakistan - a base of over 31 million and growing. We
pride ourselves on being the first cellular service provider to operate on a 100% digital
GSM technology in Pakistan that also provides state-of-the-art communication solutions
to its customers.

Brands of Mobilink

Indigo (Postpaid)

JAZZ (Prepaid)

Mobilink PCO
WIMAX (Internet Service Provider)

Operations of Mobilink

Mobilink offer both postpaid (Indigo) and prepaid (JAZZ) solutions to their customers.
Both the postpaid (Indigo) and prepaid (JAZZ) brands are the largest brands of their kind
in the Pakistan cellular industry.
In addition to providing advanced voice communication services that makes the lives of
millions that much easy, they also offer a host of value-added-services to their prized
customers. At the same time, Mobilink places high importance to its coverage, which is
why we cover you in 10,000+ cities and towns nationwide as well as over 130 countries
on international roaming service. In other words, they speak your language, everywhere.
With a soft launch on 1st July 2008, Mobilink is now the second WIMAX internet service
provider in Pakistan. Currently providing services only in Karachi. They started offering
DSL broadband through a wholly owned subsidiary, Link.Net



Today, KFC is the world’s largest and most well known chicken restaurant chain, with
more than 10,000 locations worldwide, in 78 countries. KFC and its franchises employ
more than 20,000 people worldwide.KFC serves more than 4.5 billion of chicken
annually, to approximately 7 million customers a day, world
Born and raised in Henryville, Indiana, Sanders passed through several professions in his
lifetime.[5] Sanders first served his fried chicken in 1930 in the midst of the Great
Depression at a gas station he owned in North Corbin, Kentucky. The dining area was
named "Sanders Court & Café" and was so successful that in 1936 Kentucky Governor
Ruby Laffoon granted Sanders the title of honorary Kentucky Colonel in recognition of
his contribution to the state's cuisine. The following year Sanders expanded his restaurant
to 142 seats, and added a motel he bought across the street

KFC in Pakistan

KFC came to Pakistan in 1996 with the first branch opening in Karachi and later in
Lahore. The Franchisee was a Pakistani owned and operated, Dubai-based company the
Cupola Group, which owns licenses and its own restaurant throughout Pakistan and the
middle-east. South Region including Karachi and Hyderabad (interior Sindh).North
Region including Lahore, Rawalpindi and Islamabad (Punjab).They have a total of 44
outlets working in Pakistan. 1 outlet is in Islamabad, 2 in Rawalpindi,21 in Karachi, 11 in
Lahore and other in others city of Pakistan like Faisalabad, Hyderabad, Gujranwala,
Sialkot, Multan, Peshawar and Jhelum.KFC say that for the last seven years they stand as
the market leader in the fast food category and our strength lies in the mass appeal of our
products and great service

Chicken Meals
Sandwich Meals
Family Deals

Operations of KFC
They have a total of 44 outlets working in Pakistan. 1 outlet is in Islamabad, 2 in
Rawalpindi,21 in Karachi, 11 in Lahore and other in others city of Pakistan like
Faisalabad, Hyderabad, Gujranwala, Sialkot, Multan, Peshawar and Jhelum.KFC say that
for the last seven years they stand as the market leader in the fast food category and our
strength lies in the mass appeal of our products and great service.


Company’s History

Pepsi Cola International is world renowned soft drinks brand. It is a very well organized
multinational company, which operates in almost all over the world. They produce, one
of best carbonated drinks in the world. Pepsi is a symbol of hygiene, quality and service,
all over the world. Pepsi is producing Cola for more than 100 years, and it has dominated
the world market for a long time. Its head office is in New York. Pepsi-Cola is a
carbonated beverage that is produced and manufactured by PepsiCo. It is sold in stores,
restaurants and from vending machines. The drink was first made in the 1890s by
pharmacist Caleb Bradham in New Bern, North Carolina. The brand was trademarked on
June 16, 1903. There have been many Pepsi variants produced over the years since 1903,
including Diet Pepsi, Crystal Pepsi, Pepsi Twist, Pepsi Max, Pepsi Samba, Pepsi Blue,
Pepsi Gold, Pepsi Holiday Spice, Pepsi Jazz, Pepsi X (available in Finland and Brazil),
Pepsi Next (available in Japan and South Korea), Pepsi Raw, Pepsi Retro in Mexico,
Pepsi One, Pepsi Ice Cucumber and Pepsi White in Japn


The market in Pakistan is surely dominated by Pepsi. It has proved itself to be the No.1
soft drink in Pakistan. Now a days Pepsi is recognized as Pakistanis National drink. In
1971, first plant of Pepsi was constructed in Multan, and from their after Pepsi is going
higher and higher.


Pepsi's greatest rival is Coca Cola. Coca Cola has an international recognized brand.
Cokes basic strength is its brand name. But Pepsi with its aggressive marketing planning
and quick diversification in creating and promoting new ideas and product packaging, is
successfully maintaining is No.1 position in Pakistan. In coming future Pepsi is also
planning to enter into the field of fruit drinks. For this it has test marketed its mango juice
in Karachi for the first time.


Traditionally there are three categories of beverages all over the world. These are:
1. Cola
2. Lemon and Lime, Diet etc.
3. Flavored.

At the initial stage Pepsi introduced single product i.e. Pepsi Cola in 250 ml (Standard
size). Right now Pepsi is producing these three categories:
1. Pepsi Cola
2. Lemon & lime (as Teem & 7up)
3. Mirinda Cream (in Karachi)
4. Mountain Dew(just in)



Siemens is Europe's largest engineering conglomerate and the largest electronics

company in the world.Siemens’ international headquarters is located in Berlin and
Munich, Germany. The company is a conglomerate of three main business sectors:
Industry, Energy and Healthcare with a total of 15 Divisions.

Siemens Pakistan

For 85 years, Siemens has been active in Pakistan, where it holds leading positions in the
three application fields: Energy and Environmental Care, Industry & Public
Infrastructures and Healthcare. The Siemens IT Solutions and Services Group functions
across all three fields. Siemens is the country’s No. 1 supplier of high-voltage grid
stations, switchgear products and systems, power distribution and power transformers,
and network consultancy. The company has also built a new 220kV Power Transformer
factory, and is poised to meet the demand in this sector nationally and in the region. In
fiscal 2007 (October 1, 2006 – September 30, 2007), sales to customers in Pakistan
amounted to EUR 230 million. New orders totaled EUR 280 million. With a workforce of
1,400 employees, Siemens is one of the most important employers in the country and the
largest employer of engineering graduates in the country. Directly and indirectly Siemens
provides employment to more than 4000 persons across the country.

Operations in Pakistan:-

Industry Sector

Siemens Pakistan maintained its leadership position

in Industry Sector by winning the orders for Electro Mechanical
Refurbishment, Underground External Electrification and Street Light
System of DHA (Defense Housing Authority) Phase V (Lahore) and order
from WAPDA (Water and Power Development Authority) for
Electrification of New City - Mangla and flawless completion of
Electrical, Mechanical and civil works (Train III) at ENI Pakistan.

Energy Sector

Siemens Pakistan received an order for 500kV Rewat

substation located near Islamabad. In addition an order for switchboards
was secured from the Ministry of Energy and Water (MEW), Afghanistan
which is a big milestone. Work on the first state-of-the-art KESC (Karachi
Electric Supply Corporation) Load Dispatch Centre project is being
executed and it will be completed in 2009.Siemens Pakistan success in the
steam turbines continued with selling of a 47 MW state of the art Steam
turbine SST-600 for an IPP (Independent Power Producer) which is
expected to reach its commercial operation by 2010. In April 2008, DHA
Cogen Ltd, one of our most prestigious projects in the country, started its
commercial operations. This is a desalination plant that will provide
94MW power and 3 million gallons of potable water per day.

Healthcare Sector

Siemens Pakistan continued to establish itself as an innovation and

technology trendsetter in Pakistan by obtaining orders from Pakistan
Atomic Energy which procured 4 Linear accelerators and two OPEN
BORE Virtual Simulation CT scanners along with the latest integrated
oncology solution from Siemens to be installed at three of their thirteen
Medical centers in Pakistan. Atomic Energy Medical centers are ranked
among Pakistan's leading Cancer treatment and Nuclear Medicine centers,
where patients are diagnosed and treated at a minimal cost


9:-Fire Alarms


ICI is the world’s largest manufacturer of the paints and industrial coatings. ICI paints are
headquartered in Berkshire, UK and operate 55 manufacturing sites in 25 countries. In
this sector its main strength are in

 Decorative paints
 Industrial paints
 Refinish paints for vehicles.

ICI Pakistan
In 1965, ICI UK acquired a 50% interest in the paints company named as “Fullers Paints
Pakistan Ltd” situated at Ferozepur Road, Lahore. Its name was changed to Paintex
limited and it was converted into a public limited company in 1973. the capacity of the
plant was upgraded and enhanced in 1981 and since then the business has proceeded
progressively to consolidate the market share in the major segments of decorative paints.
Industrial and automotive paints market.
Operations of ICI
ICI paints business Pakistan has become an undisputed leader in the decorative motor and
refinish segments of Pakistan’s paint market. With production of 14milion liters, ICI
Pakistan touches the lives of painters, architects, paints retailers and home owners with
color throughout the country. ICI’s Dulux, Glidden, Maxilite and paintex brands have
become as much a part of painter’s vocabulary as color choice, quality, variety and
durability are the criteria for the selection of the paints by the end-users.
ICI Paints
Pharmaceuticals & Animals Health
Agrochemicals And Seeds
ICI Polyester Staple Fiber
ICI Soda Ash
Pure Terephthelic Acid
• Dulux Weather Shield (Acrylic Based). (Decorative)
• Dulux water repellent (D)
• Dulux matt enamel, (D)
• Dulux Gloss (Industrial)
• Dulux Pentalite (D)
• Dulux Pentalite Natural Whites (D)
• Paintex plus Emulsion. (D)
• Glidden Higloss (I)
• Glidden Ultrahide (D)
• Glidden Ultratex (D)
• Maxilite (D)
• Dulux Pearl Glo Matt Finish Enamel (I)
• Dulux once (D)
• Dulux Super Gloss Enamel (I)
• Dulux Aluminum Paint Dual Pack (I)
• Dulux Synthetic Clear Varnish

Polyester Fibers

• Semi Dull PSF

• Single Component Dyeing
• Super White
• Extra High Tenacity
• Low Pill
• Micro fibre



Toyota Motor Corporation (Toyota Jidōsha Kabushiki-gaisha), or Toyota is a Japanese

multinational corporation. The company was founded in 1937 by Kiichiro Toyoda as a
spin-off from his father's company Toyota Industries to create automobiles. It created,
first as a department of Toyota Industries, its first product Type an engine in 1934 and its
first passenger car in 1936. It is headquartered in Toyota, Aichi, Japan.
Toyota together with its half owned subsidiary Daihatsu had the top sales for the first
quarter of 2007 selling 2.35 million vehicles. Toyota plans to produce 9.4 million
vehicles in 2007.


• Camry

Toyota in Pakistan

The company was incorporated in Pakistan as a public limited company in December

1989 and started commercial production in May 1993. To best serve its customers Toyota
Motors has established a network of twenty-seven dealers in Pakistan, fully equipped to
meet customer needs in sales, service and spare parts. Toyota vehicles are marketed
through dealership network.


Operations in Pakistan

• The most leading company,

• The most successful company.
• The most popular company.
• Providing the best durability & smooth drive.
• Toyota’s motto is Delighting customers.
• Wide range of products which no one can compete.
• More spacious than others.
• More dashing & attractive.
• Economical & provide greater mileage.
• Greater market share than other companies.
• Easily availability of spare parts.
• Best in driving on damage roads.
• Highly customer’s satisfaction ratio comparatively to others.
Standard Chartered Bank

With global headquarters at London, Standard Chartered is clearly the world's leading
emerging markets bank with assets of over $90 billion, employing 30,000 people in over
500 offices in more than 50 countries primarily in the Asia Pacific Region, South Asia,
the Middle East, Africa and the Americas. It derives its name after two banks - Standard
Bank of British South Africa and the Chartered Bank of India, Australia and China - that
merged in 1969. The Chartered Bank was founded in 1853 following the grant of a Royal
Charter from Queen Victoria, and opened its first overseas branch ever in Calcutta, as it
was then known.


Standard Chartered Grindlays Bank is the oldest and largest foreign bank in Pakistan.
Standard Chartered Grindlays is one of the few banks in Pakistan that offers a complete
range of investment banking services.
It enjoys a unique position in the financial sector of Pakistan. The Bank opened its first
branch in 1884 in Karachi. Today the Bank operates 15 branches and staff strength of
approximately 500. The 15 branch network includes 7 in Karachi, 3 in Lahore, 1 each in
Rawalpindi, Islamabad, Peshawar, Quetta and Sialkot.


The product range consists of:

• Working capital finance
• Term finance
• ATM service
• Trade finance and correspondent banking services along with fund transfer
facilities and electronic banking through link products.


Standard Chartered has been in Pakistan since 1863 and is one of the longest operating
foreign banks. There are 6 branches that offer full banking services in corporate,
institutional and consumer banking and custody services. Adopting a pro-active approach,
it offers a flexible and comprehensive range of financial services, in particular
transactional banking products. It has invested in our branches to ensure that our business
is supported by high-tech operations using State-of-the-art technology. It has dedicated
Customer Service Centers with solution-oriented cash product specialists to provide our
customers with cost-effective solutions. Electronic delivery system has been put in place
to give customers maximum control of their transactions. Pakistan's currency is the

In Pakistan, Standard Chartered is the largest foreign bank and the only one with a
presence in every province. Customers of the Bank can enjoy access to a wide network of
21 branches and over 120 ATMs across Pakistan.
The merger of Grindlays with Standard Chartered Bank create the premier international
bank in Pakistan and put us in a position to deliver significant benefits in terms of
network, products and customer service
Standard Chartered Grindlays Bank is one of the first foreign banks to have introduced 24
hours, 7 days a week ATM service in Karachi back in 1991. ATM cards give round the
clock access to a customer's Bank account enabling them to withdraw and deposit cash at
their own convenience. The Bank has the largest ATM network amongst the foreign
banks with 9 ATMs, four in Karachi, two in Lahore and one each in Islamabad,
Rawalpindi and Peshawar. Standard Chartered Grindlays VISA is a globally accepted
credit card welcomed at locations displaying the Visa logo. The Card can be used at over
14 million establishments in 160 countries around the globe and over 10,000 outlets in



Availability of quality goods and services in the host country:

In some cases, production in a host country may be primarily aimed at the export market.
However, in other cases, the inward investment might have been made to gain access to
the host country market to circumvent trade barriers. In the case of many Japanese car
manufacturers the investment made into UK production has enabled them to get a
foothold in the EU and to avoid tariff barriers.

Skills, production techniques and improvements in the quality of human


It can be argued that MNCs bring with them new ideas and new techniques that can help
to improve the quality of production and help boost the quality of human capital in the
host country. Many will not only look to employ local labor but also provide them with
training and new skills to help them improve productivity and efficiency.
Tax Revenues:

For the host country, there is a likelihood that the MNC will have to be subject to the tax
regime in that country. As a result, many MNCs pay large sums in taxes to the host
government. In less developed countries the problem might be that there is a large
amount of corruption and bad governance and as a result MNCs might not contribute the
tax revenue they could and even if they do it might not find its way through to the
government itself.

Improvements in Infrastructure:

In addition to the investment in a country in production or distribution facilities, a

company might also invest in additional infrastructure facilities like road, rail, port and
communications facilities. This can provide benefits for the whole country.

Employment Effects:

Another beneficial effect of the MNCS is that they bring employment opportunities to the
host country that would otherwise not be created. Direct effect arise when a foreign MNC
employs a number of host country citizens

Balance of Payment:

A country’s balance of payment keeps the track of both its payments and receipts from
the other countries. The balance of payment effect is an important consideration for the
host country. When a MNC establish a foreign subsidiary the capital account of the host
country benefits from the initial capital flow

Competition and economic growth:

Efficient functioning of markets depends on adequate level of competition between the

producers. When a new enterprise is established, the number of players in the market and
consumer’s choice increases. In turn this can increase the level of competition in a
national market, thereby driving down the market prices and increasing the economic
growth. Increased competition tends to stimulate capital investments by firms in plant
and equipment, research and development as the struggle to gain a competitive edge over
the rivals.

Learning of skills:

Benefits arise when a local enterprise learns valuable skills from the MNCS by its
exposure in the market. A firm can learn about specific superior management techniques,
superior products and process techniques

Foreign policy:

The establishment of MNCs helps in creating the relationship with different countries in
the world. Thus helps in enhancing the foreign relations

The Costs of Multinationals

The costs can be summarized in the points below - for the most part, the costs are closely
linked to the benefits but it will depend on the extent of the benefits that might arise as a
result of the activity of the MNC.

De-merit goods:
Some companies might be producing goods that are not beneficial. Examples might
include tobacco products and baby milk - mentioned earlier.

Repatriation of profits:
Profits might go back to the headquarters of the MNC rather than staying in the host
country - the benefits, therefore, might not be as great.

National sovereignty:
The host governments worry that the establishments of MNCS is accompanied by some
loss of economic independence. The concern is that the key decisions that can effect the
country’s economy are made by the foreign parent that has no real commitment to the
host country and over which the host country has no real control

The source of domination:

The MNCS enjoys the benefit of domination. They politically control the economy of the
host country
Infant Industries:
The newly established suffers a lot due the arrival of the multinational companies. The
don’t get the enough time to developed and fully establish. Before the flourish the
conditions becomes so worst due to MNCs that they wiped out.

Knowledge and Skills Transfer:

The multinational companies usually hire the skilled, trained and professional employees
already working in the domestic companies. So the knowledge and skills transfers from
these domestic companies to the multinational companies subsidiaries.

Cultural Effects:
Sometimes the multinational companies effect the values, norms and traditions of the
host country very badly as they bring with them their own culture and try that the host
country’s national adopt these values. Through different marketing strategies they try to
sell luxurious products to the people. Some people who don’t have enough money to
fulfill their basic needs as a result they adopt different illegal ways for acquiring these
products which is very bad for the society.

1. New and sunk companies of Pakistan facing problems due to MNCs. As new
companies are struggling for growth and development. While sunken companies
are in danger, it is difficult for them to survive. In these conditions if MNCs come
in these industries then domestic countries will finished.

2. Due to MNCs society face environmental problems. As they pollute our

environment. For example different factories of Multan, Lahore, and Karachi
pollute water and air. Telecommunication companies have adjusted their tower in
urban areas. Their ultra void is harmful for human health. These things are very
harmful for our society.

3. Unethical issues:-

MNCs are involved in many unethical issues like follows

i. Illegal products:-

Some products are not good for our society like wine, ham burger and pizza,
low quality products. It is unethical to sell these products in Pakistan.
ii. Cultural Differences:

Pakistan is Muslim country and Islam has specific values, traditions. these
companies are effecting these values with the help of their products and
marketing. They are forcing our youngsters to go against our own traditions.

iii. Child Labors:

MNCs are hiring Childs labors. As they are cheaply available in Pakistan
which is unethical. They are playing with their lives.

4. MNCs are developed organizations in their fields. Domestic industries are facing
problems due to MNCs. Domestic industries are producing their product in higher
cost so they have to charge high price but due to high competition with they are
unable to charge high price and they go to end

5. No doubt consumers are taking benefit from MNCs as they get

• Quality
• New Technology
• Variety

at low cost.

6. MNCs are very important source of getting foreign exchange which is useful for

7. MNCs are improving our relations with other countries with which they belong.
People and Government of other countries are coming closer to Pakistan due to
8. MNCs have created lot of jobs in Pakistan. Which very good for our country as
due to it poverty decrease and people become prosper.

9. One bad practice of MNCs is repatriation of profit. According to it they sent their
profit to their home country while they are using resources if home country which
bad practice.

10. MNCs help society with different ways as in Pakistan when earthquake come
MNCs help a lot effected people .Many companies are working in Pakistan for
poverty reduction, to spread education,Health.Examples are Unilever ,siemens
and P&G.


1. MNCs should invest in different sectors of Pakistan especially in those sectors

which are weak. As in Pakistan most investment comes in banking but other
sectors are completely neglected like power.
2. Government should make strict policies to control environmental problems and
unethical issues. And ensure their implementation to MNCs which are working in

3. MNCs should be forced to follow all rules and regulations which they are
following in their home country.

4. The quality of their products should be of same standard like other big countries.
As if they are making products for Pakistan must have same quality as they are
producing for UK.

5. Repatriation of profit should be stopped because they are using resources of host
country and this profit should be invested in that country.

6. They should develop, train compensate and provide reasonable salaries to human
resources of local employees.