Introduction

Multinational Companies (MNC) or Multinational Enterprises are companies which operate in more than one nation state. MNCs have considerable investments in foreign companies and manage these investments actively. The foreign activities distinguish them from national companies. The active role in the management of foreign investments distinguishes them from other organizations, like banks, with foreign investments. MNCs produce for a number of local markets according to local tastes and regulations. The MNC is structured like a federation with one headquarter and many more or less autonomous national divisions. Knowledge about the local situation, gives local managers a powerful say in the running of the MNC. It is, oftentimes, being referred as Global Companies or Transnational Companies. However, there are also differences with these three terms. Global companies produce for the world market. Production takes place where it can be done cheapest. The company is not organized according to country, like a MNC, but according to products. Management is highly centralized. The products are not designed to cater for specific local tastes. The attractive feature of the products of global companies is their price, since the standardized and high volume production methods make it possible to produce cheaply. The product division managers have the power in a global company. On the other hand, a transnational company (TNC) is a business which manages foreign direct investments and produces goods or services in more than one country. TNCs are important global players with considerable resources. TNCs are less-tied to one mother country and becoming more invisible. TNC try to combine the market specific approach of MNCs and the standardized production methods of the global companies. The management is therefore organized along country management and product