TNCS / The main features of Indian TNCs
Meaning of Indian Transnational Corporations (TNC)
An Indian Transnational Corporation (TNC) is one that belongs to India i.e having headquarters in India and having business operations in the form of subsidiary affiliate, in at least one foreign country.
The latest policy of the government has been encouraging foreign investment by Indian companies, in tune with the philosophy and policy of globalisation.
Birla’s have headed the group of Indian investors abroad; controlling one-fourth share of Indian joint ventures abroad. Next to Birla’s are the Thapar group, Kirloskar group and Tata group. Characteristics of Indian Transnational Corporations (TNCs)
Following are the chief characteristics of Indian Transnational Corporations
(i) Smaller Size but with Growth Orientation: Indian transnational are smaller in size as compared with foreign transnational; as Indian transnational are rather new entrants to international business field. However, Indian TNCs are growing through acquisitions. For example, Asian Paints acquired Delmerge Forsyth and Co. of Sri Lanka and four others from Australia, Egypt, Singapore and Fiji.
(ii) Increasing Geographical Spread: Indian transnational are mainly located in developing countries like Malaysia, Indonesia, Thailand, Singapore, Sri Lanka, Nigeria, Kenya, UAE etc. However, they have made some inroads into developed countries like the USA, UK, and Germany etc. Ranbaxy directly manages operations in 34 countries and has manufacturing facilities in seven. Dr. Reddy’s Labs, has offices in 8 countries; research facilities in the USA and manufacturing facilities in India, UK and China. ONGC is engaged in the exploration, development and production of crude oil and natural gas in eight foreign countries, including Russia, as one of those eight.
(iii) Low Cost/Product Differentiation Strategy: Indian TNCs use low cost and / or product differentiation strategy to meet severe competition from foreign MNCs.
(iv) Global Workforce: Indian TNCs are increasingly employing local workforce of host country to have a better and realistic view of local culture, habits and values. For example, Infosys has 600 employees from 33 nations, other than India.
(v) Wider Produr -Mix: Indian TNCs are redefining their product mix. For example, Mr. Kumara Mangalam has taken the Birla groups inte apparel, software, cellular services, financial services and insurance.
(vi) Adoption of Modern Management Techniques with Orientation towards Research and Development: Indian TNCs are constantly applying latest management techniques to achieve desired results. They are spending huge sums on research and development to develop the art and skills for remaining competitive in global markets characterized by intense competition.
(vii) High Mortality Rate: Many Indian TNCs have failed due to unclear objectives and poor understanding of foreign culture and foreign markets.
