A multinational corporation (MNC) is a business operating in many countries. It has many headquarters and replicates the same business structure in each country. An MNC is distinguished from a transnational corporation (TNC) by its structure. There are more than
60 000 MNCs with over 600 000 foreign affiliates. Almost two-thirds of world trade takes place between MNC corporations and their subsidiary branches and affiliated companies. A transnational corporation (TNC) is a business that has its headquarters in one country and operations (e.g. resource extraction, manufacturing) and branches in many countries. Monsanto and Sony Corporation are examples of TNCs.
MNCs and TNCs have an important influence in countries that seek their jobs and investment. They are also increasingly finding themselves the subject of consumer-based global campaigns in which consumers in developed countries boycott products because of concerns about company activities in developing countries.
In response to such criticisms, many companies claim efforts towards corporate social responsibility. These responsibilities include reporting to, and being accountable to, society and not only shareholders; thus a company's human rights record and environmental impact come under wider scrutiny. More recently, several companies employing a large workforce in Africa have agreed to cover the costs of treatment for workers with HIV/AIDS. This action has an obvious ethical dimension, but it also increases productivity and recruitment for the firm.
There is also a debate about whether market-based incentives are enough to make companies act responsibly. This leads to a debate about the effectiveness of voluntary versus legal codes of conduct. Many US companies argue for voluntary codes while international organizations and other nations are moving more towards global and legally enforceable codes, for example, the Framework Convention on Tobacco Control.