Globalization is definitely an advantage to both producers and consumers.
Advantages to producers:
1. Globalization increases the standard of production by investing in newer technologies and improved production methods.
2. Large companies have emerged as Multinational companies due to globalization.
Advantages to consumers:
1. Consumers get quality goods at lower prices because of heavy competition that has resulted due to globalization.
2. This has led to a better standard of living.
Globalization has been a benefit for the development of a country’s economy.
MNCs are the Multi-National Companies. These MNCs set up their production centres in those areas where there is an abundance of cheap labour, proximity to the markets and availability of other factors of production.
These MNCs spread their production units across the globe in the following ways:
a. Partnership with local companies:
MNCs produce goods by joining hands with some of the local companies. These local companies take money from MNCs for additional investments, and they make use of the latest technology for the production brought in by MNCs.
b. Buying local companies or competing with local companies:
The MNCs expand their business by buying the local companies and increase their production.
c. Supplying through local companies:
MNCs place their order with small local producers. These products are then supplied to the MNCs. These MNCs sell these goods under their own names. Generally, the MNCs fix the price and quality of these products even though small producers produce them.
Thus, the Multi-National companies control and spread their production across the globe.
Rate this question :