Explain briefly the following features of global enterprises:
1.Huge capital resources; 2. Foreign collaboration; 3. Expansion of market territory; 4. Centralised control.
1.Huge capital resources : These enterprises have huge financial resources and also possess the ability to raise funds from different sources. They can raise funds by issuing equity shares, debentures, etc. Because of their high credibility in the market, the investors of the host countries are always willing to invest in them.
2.Foreign collaboration : Usually, these enterprises enter into agreements with companies of the host countries. These agreements are made in respect of sale of technology, production of goods, patents, resources, etc.
3.Expansion of market territory : As the network of operations of these enterprises extends beyond . their existing physical boundaries, they expand their market territory. They operate through their branches, subsidiaries in host countries and occupy dominant positions in various markets.
4.Centralised control: Despite the fact that branches of these enterprises are "spread over in many countries, they are controlled and managed by their Head Office (H. O.) in their home countries only. All these branches have to work within the broad policy framework of the parent company. A common system for working of all the companies under their control is evolved.