Q. 24.3( 3 Votes )

What are the adva

Answer :

Multinational companies (MNCs) are the companies that control the production process in more than one nation. These companies set their offices in a particular region where they can get cheap labour and other resources so that the cost of production is low and they can earn a profit.


The advantages of Multinational companies (MNCs) are –


• They sell their finished products and produce goods and services globally.


• By spreading production across the border in countries like China, India, Mexico, and Eastern Europe, the MNCs save up to 50-60 percent cost-savings which pose as an advantage of MNCs.


• The MNCs have the power to determine price, quality, delivery, and labour conditions for the distant producers whom they have given the order of production.


• The distant countries are getting interlinked with developed nations because of MNCs.


The disadvantages of Multinational companies (MNCs) are –


• The production process under them is organised in complex ways.


• MNCs could only be set up in the countries where there is the availability of cheap labour and resources.


• MNCs, in other words, control the entire production process and also exceed the budget of the developing country. This way, MNCs are taking control of all the local markets in many countries posing a problem to the local population.


• These MNCs buy products from the small producers and later sell those products under their own brand name.


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