What defines a multinational corporation (MNC)?

A multinational corporation (MNC) is defined by its operations that extend beyond the borders of its home country, specifically characterized by having facilities in at least one other country. This international presence allows MNCs to leverage diverse markets, resources, and labor, thereby expanding their business operations on a global scale. The ability to engage in business activities, such as production, marketing, and sales, in multiple countries is what distinguishes an MNC from other types of companies.

Firms that operate solely within their home country do not meet the criteria for being considered multinational. Similarly, a business that lacks any international operations or trade does not function as an MNC, as it does not engage in the cross-border complexities and advantages that multinational operations provide. Thus, the defining characteristic of an MNC is its establishment and functioning in multiple countries, which directly impacts its strategies, operations, and overall business model.