There are millions of corporates around us, which are still striving to reach their pinnacle. Besides, each corporate has been classified based on its geographic structure.
Key Takeaways
- TNCs, or transnational corporations, operate in multiple countries and have a significant global presence. In contrast, MNCs, or multinational corporations, have operations in multiple countries but do not necessarily have a global presence.
- TNCs often have a centralized decision-making structure, while MNCs may have more decentralized operations.
- TNCs are often associated with high economic and political power, while MNCs may have a smaller impact on the global economy.
TNC vs MNC
TNC (Transnational Corporation) has a decentralized management system and they work in different countries. They have many companies in various countries controlling product marketing and manufacturing. MNC (Multinational Corporation) has a centralized management system and they have subsidiaries.
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TNC is the abbreviation of Transnational Company. They are often differentiated from MNC based on their trading with more than one country except for their homeland.
On the other hand, the Multinational Company is the acronym of MNC. It is the pacemaker for companies in more than one country, including its homeland also.
Comparison Table
| Parameters of Comparison | TNC | MNC |
|---|---|---|
| Meaning | Transnational Corporation is a decentralised enterprise that subsumes its production of goods and services, Fx or any investments with more than one country. TNC set its network in developing countries for cheap cost of production. | Multinational Corporations is a centralised company that runs the production of goods, services, investment and management in its home country as well as in other countries. |
| History | TNC incipient in the 16th Century in Western Europe. Later in the 19th Century, TNC emerged widely in the field of industrial capitalism, where burgeon involvement by many companies mainly in the US and Western European nations. | In 1601, the East India Company emerged as Multinational Company-trading goods and services globally. Later in 1603, the Dutch East India Company was twin MNC to the East India Company. |
| Headquarters | TNC Headquarters doesn’t locate in its home country but in some other developing country where production occurs. | MNC main Headquarters located in its home country- where the production of goods began initially. |
| Structure | Transnational corporation follows decentralised structure- the corporation operates in numerous countries where goods and services are produced. | Multinational Corporation is a centralised management structure, where the home country is considered the main headquarters- while operating other countries for production. |
| Examples | A renowned company Nestle is a Transnational company that runs its operations in more than one developing countries. | Microsoft. Coco-Cola, IBM and Apple etc. are the renowned Multinational companies in the world. |
What is TNC?
As earlier mentioned, Transnational companies are decentralized and capable of burgeoning their revenue in contact with local markets rather than having any specific homeland for themselves.
Their strategic ideas are much appreciated as they target economically developed countries for commerce in a way to merit cheap labor for better production.
TNC has been a globally operated corporation whose only jackpot is the dynamic flux of foreign investments around their headquarters.
Other examples of TNC are McDonald’s, Apple, Starbucks, and you name it, which companies have a globally engrossing contribution with no official motherland.
What is MNC?
MNC is an abbreviated form of Multinational Company. It owns a home company as well as its subsidiaries, unlike TNC, which only owns many companies around the globe.
Due to emerging globalization, they were often criticized for inequality, unemployment, tax avoidance, and wage stagnation among non-natives.
However, they had brought in the best raw materials from abroad to their homeland. Microsoft company is a good example of MNC, as they lend their trade in foreign lands, such as India, with its headquarters in America.
Main Differences Between TNC and MNC
- TNC doesn’t have any specific headquarters and runs operations in various developing countries. Albeit, MNC has its Headquarters in its home country and guides its operations in more than one country.
- According to marketing, TNC sets its subsidiary companies in developing countries for the low cost of production, whereas MNC sets its auxiliary company at least one country which has a consumer price index high.
- https://books.google.co.in/books?hl=en&lr=&id=ztTH_USwrWwC&oi=fnd&pg=PR1&dq=transnational+corporations&ots=UwP7SR5wx1&sig=RYPVXlR9pMlQO9SpYLaDduNaCn4
- https://www.jstor.org/stable/1815843
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.
