1. MNC/ TNC
• Carries out business operations in more than one country. Such facilities are
acquired through the process of FDI
• Benchmarks used to define ‘multinationality’
• Operates in several countries
• Generates significant share of total revenue from foreign market
• Has significant ratio of foreign to total number of employees
• Directly control foreign investment
• Mode of Entry
• Joint Venture
• Setting up subsidiaries
• M&A
• Benefits to Host Nation
2. International Code of Conduct on transnational
Corporations (UNCTC)
• Brought out in 1980 by the UN but never approved.
• UNCTC covered a range of MNC duties in the host state such as –
1. Respect the national sovereignty and observance of domestic laws, regulations and
administrative practices
2. Adherence to economic goals and development objectives, policies and priorities
3. Adherence to socio-cultural objectives and values
4. Respect for human rights and fundamental freedom
5. Non- interference in internal political affairs and intergovernmental relations
6. Abstention from corrupt practices
7. Apply good practices in relation to payment of taxes
8. Abstention from involvement in anti-competitive practices
9. Consumer and environmental protection
10. Disclose relevant information to host country governments
3. Corporate Social Responsibility
• Gained increased significance in recent years
• CSR is a voluntary, corporate-driven initiative to promote self-regulation as a
substitute for regulation at national or international level.
• CSR is a self-regulating business model that helps a company be socially
accountable to itself, its stakeholders, and the public.
• By practicing CSR, companies can be conscious of the kind of impact they are
having on all aspects of society, including economic, social, and
environmental.
• The 1992 Earth Summit in Rio de Janeiro explicitly endorsed voluntary
approaches and is considered modern CSR’s birth
• ILO’s Tripartite Declaration of Principles concerning multinational enterprises
and social policy and OECD;s guidelines for multinational enterprises are two
most prominent sources of CSR standards
