Introduction In this new era, almost every aspect of the economy is impacted by globalization. More countries are getting engaged in trading with each other in order to increase their profit or protecting them from being eroded by competition. Companies must be able to adapt their policies to respond to new global market challenges. The global managers have to serve the global demand rather than just focus on the local demand. Therefore, innovative and effective strategies should be designed and implemented to enable firms to capitalize on global market opportunities while carefully managing its inherent threats in order to attain long-term victory.
Multinational corporations (MNCs) are companies who move across their home countries borders to conduct business in foreign markets. They ordinarily consist of a parent company located in the home country and at least 5 subsidiaries. These MNCs are company who deals with the globalization. They specialize in production and export those goods that they can produce with the highest relative efficiency and import those good that other nations can produce relatively more efficiently. The emergence and activities of MNCs played an important role and had impacted a huge extent on the concept of globalization.
The MNCs create foreign direct investment (FDI), which is defined as a company from one country making a physical investment into building a factory in another country. The FDI are important to a country as it helps to attract the foreigners to invest in their local market which generate cash flow to country. Besides, it boasts the local market and yet increases the GDP of the country. Well, it is said that there are always two sides to a coin. FDI also bring trouble to country where the foreign investors do not have to be completely obedient to the economic policies of the country where they have invested their