MNCs vs Startups: What do you think Gen Z is choosing? Let’s find out in this article.
MNC stands for Multinational Company or Corporation. By definition, a company that operates outside its home country to carry out business services or goods is defined as a multinational company.
In detail, a company has to put up with a lot more criteria than just to export goods in foreign countries to be labeled as an MNC.
Characteristics of MNCs
Before discussing MNCs vs startups, let’s look at the characteristics of MNCs. MNCs have to deal with a lot just like any other business. But when you want to be recognized as a multinational company you have to take your business to that level.
Here are some of the characteristics of a multinational business:
1. Established on a Corporate Level
Not all companies that are functioning in foreign lands can be referred to as multinational companies. A company should be established on a corporate level.
2. Bigger Size
Multinational companies are bigger. Meanings, they have more employees, hundreds and even thousands of them working across the globe.
3. Centralized Ownership
An MNC operates in several countries but keeps the control and ownership of the country in its own country. It may share ownership with business partners in different countries.
4. Adequate Spending on Marketing
An MNC never loses sight of its marketing plan. In fact, marketing strategies are one of the integral parts of their business plan. What they spend on marketing is what makes the business so successful hence making its way to the Multinational tag.
5. Bigger Goals and Targets
A company may operate in foreign lands but it might not set higher goals for the company. It can restrict its operations as such that only allow them to make a certain profit and not beyond that because their production plan does not allow them to exceed. If we have to compare MNCs vs startups, an MNC has a bigger spending budget thus, they set higher targets to achieve.
A startup is any business in its initial stages that nourishes gradually, based on the business idea and plan. One or several entrepreneurs come up with a plan that can thrive in the market, invest according to the budget, which in the beginning is not too much, and then work their way through to develop their startup.
Characteristics of a Startup
Startups are new businesses so their characteristics vary from a multinational company. Here are some of the fundamentals to go through:
1. An Idea/Product That Can Nourish
A startup can face many challenges in its initial stages. To be heard amidst heavy competition, it has a product that is innovative and different from others.
2. Looking for Feedbacks
A startup relies extensively on feedback, as it should. Feedbacks help it understand its drawbacks. It helps new business owners to understand what they are doing wrong.
3. Leveraging Technology
To beat the competition, startup owners understand technology thoroughly as they know it can get them ahead in the game. They leverage it against the competition to get their voice heard.
4. Versatility and Diversity
A startup, unlike multinational companies, is not rigid in its business culture. It welcomes talented workers from all cultures.
As a startup nourishes on a unique idea, it is innovative and does not rely on rigid business ideas or processes.
Keeping in view the characteristics of both, let us discuss some of the differences and benefits for both.
- The major difference between the two is that one operates on an international level while the other operates in only one country.
- A multinational company has a bigger size, bigger pockets, and spending budget as we have discussed. A startup on the other hand has limited resources.
- A multinational company creates opportunities for locals as well as foreigners thus it’s a bigger opportunity creator. A startup tries its best to welcome talent but can only onboard a limited number of employees.
- As an MNC operates on an international level, it has higher criteria for recruitment. A startup, however, searches for talent and gives people a chance to prove themselves as valuable assets.
- Multinational companies have relatively bigger salary packages. Startups on the other hand provide many opportunities.
- A beginner cannot start their career directly in an MNC. If you are starting out in your career and looking to learn, a startup can teach you a lot.
Gen Z is more versatile than the previous generations. It looks for opportunities to learn and to prove themselves. In 2021, most of Gen Z are in their late 20s. Some are still in college while some are just starting their career. For them, it is the time to learn and progress. They are not keen to join an MNC, as they cannot learn in that environment.
Moreover, Gen Z is full of innovative ideas. Ideas that are too good to be believable at first. They need a working environment that welcomes their vision for innovation. In this case, a startup is the best place to begin your career. This is the reason Gen Z is opting for startups rather than MNCs.