Multinational companies have the following characteristics:
1. Large size
Multinational companies are large-sized business organizations. They have huge resources in terms of capital, technology, people and information. They are highly efficient and complex.
2. Multi-country operations
Multinational companies operate in several countries. They can have production, marketing and service type of operations. They cover large geographical areas. They have assets and activities in two or more countries.
3. Various objectives
Multinational companies pursue various objectives like:
- Access to new market opportunities to expand market size.
- Access to cheap raw materials to reduce costs and increase competitive capacity
- Access to cheap source of labor to reduce costs of labor and energy.
4. Various environments
Multinational companies operate in various environments. The political, legal, economic, social, cultural and technological forces differ from country to country.
5. Centralized ownership and control
The ownership and control of multinational company is centralized in the home country. They provide share ownership to local people in host countries.
6. Multiple currencies
Multinational companies deal in currencies of several countries. The risk is high because of changing values of currencies in host countries.
7. High efficiency
Multinational companies are highly efficient due to:
- Mass production leading to economic of scale
- Use of advanced technology to increase speed of production
- Professional management and marketing skills to use resources effectively.