MNC Structure
Ken Shall
MA405 Multinational Management
Grantham University
Professor : Angela Au
6/05/2012

A Multinational Company
In business today, the boundaries of the world have seemed to almost disappear. More and more companies have a much broader reach and expanding globally is almost the norm. Many years ago, few companies were able to sell products to other parts of the world, let alone conduct business operations in other countries. Then we began to see some of the world’s largest companies begin to expand globally, not only in sales, but in operations, creating a physical presence in many foreign countries.
In the early 1980’s, Honda opened up operations and began building cars in Ohio. This was a real twist, and probably a brilliant move, as it was when many Americans began to realize global expansion yet we wanted to keep jobs here and buy what was built in America. Today, with the help of the World Wide Web and Social Marketing, even a fairly small business can not only sell in other countries, but also have a physical presence there. An example of a US business expanding globally is Le Gourmet Gift Basket Inc. As early as 2004, it had 510 franchise locations including 25 outside the United States. (Le Gourmet Gift Basket Inc)
Forming a Multinational Company
There are two primary ways that a multinational organization is created - organically or inorganically.
The Le Gourmet Gift Baskets example above is a great example of organic growth. This company had continued slow growth until it had expanded its market to the point to where having a presence in a foreign country makes sense. Perhaps it becomes more cost effective to build a production facility in a country with a high sales volume than to continue to ship the products there, as in the Honda example.
Inorganic growth is much faster. It is a result of a merger or