Different Types of International Organizations

Different Types of International Organizations

Multi-national Corporation (MNC)

A multi-national Corporation has been described as a large scaled company owning operations, offices, facilities, warehouses, and etc. in several countries. While headquarter is located in one country which is a home country. Basically, a multi-national company is incorporated in its home country and operated in several countries. Multi-national companies can obtain a simple management or also can obtain a very complex management depending on their size of an organization and their scale of operation. Examples of multi-national companies are very large companies such as The Walt Disney Company, EY, and PepsiCo, Inc.; multi-domestic companies such as Starbucks Corporation, and McDonald's; and transnational companies such as Unilever, and Procter & Gamble Co.

Size of Multi-national Corporation

Technically, a company turns into a multi-national company when it owns offices in at least two countries. Small multi-national companies may have few offices, operations or warehouses in different countries. In contrast, large multi-national companies may have several offices, operations, warehouses or facilities in many countries. These large multi-national companies require many staffs and managers as well as numbers of suppliers. In order to cover their operation across countries, they also need a very complex management and a system. Fortunately, last few years internet has widened up the world of multi-national operations to all businesses. Even a small business can take place into global arena and compete with other businesses.

The Walt Disney Company

The Walt Disney Company is an example of large scaled multi-national companies. Disney owns operations in many industries mainly in entertainment, mass media and park and resorts. So, Disney chooses to operate their businesses through four primary business units which is called “Business Segments”: The Walt Disney Studios includes the Disney's films, music, and theatres; Parks and Resorts, featuring the company's theme parks, cruise line, and other travel-related assets; Media Networks, which includes the company's television properties; and Disney Consumer Products and Interactive Media, which produces toys, clothing, and other merchandising. They all are segmented operationally, but not geographically; even though Disney is operating in several countries. The Disney’s headquarter is located in California, United States of America which is one and only headquarter.

Multi-domestic Corporation

        A multi-domestic corporation is an alternate with a multi-national corporation. The definition of both is generally the same. Additionally, a multi-domestic corporation follows its strategy to fit its products and services to each country which it does business. Products and services of multi-domestic companies are adopted a local domestic environment, local domestic preferences, religious customs and other characteristics of locality. The main benefit of the strategy is the products themselves are familiar to local customers. So, the customers can perceive them quickly and do not against the products. Starbucks Corporation and McDonald's obviously seem to be the best examples of multi-domestic corporations as they are well-known to people around the globe. Their products are adapted accordingly to a country as well as the design of restaurants.

McDonald’s

        McDonald's is an American hamburger and fast food restaurant chain founded in 1940. Today, McDonald's is the world's largest restaurant chain, serving approximately 68 million customers daily in 120 countries across approximately 36,900 outlets. McDonald’s restaurants in many countries serve local domestic styles of menu referring to local deviation from standard menu. The strategy is to make domestic market, or regional to be familiar with the menu. For example, the sale of McRice in Indonesia, and Ebi Burger in Singapore and Japan they all are localzied. As well as McDonald’s in Germany and some other Western European serve beer and in New Zealand serves meat pies.

Sales of McDonald’s in each regions

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Figure 1: McDonald’s 2016 Annual Report

        From Figure 1, the report shows that the revenues of McDonald in each geographical and operational performance segments are different. Even though McDonald’s tries to serve its customers according to their preferences and localized the restaurant of each country, it still cannot bring up the revenue from other segments reaching up to the U.S. So, the strategy of Multi-domestic Corporation isn’t aimed to get the same profit to all countries, but to get customers into the products.