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What are the features of MNCs?

Updated: 9/13/2023
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1.Centralized management:-A MNC has its headquarter in the home country. It expands its business to other countries so it can easily manage companies.

2.World Wide Spread of Business:-The business of the MNC is spread worldwide.

3.Better Quality Product:-A MNC has to compete on world level therfore has to pay special attention on the quality.

4. Formation:- MNC is similar to joint stock company & its formed or registered under company Act of respective country.

5. Huge capital:- MNC are able to raise huge capital by issuing share to general public within in or outside the country

6. Employed:- MNC is mainly employees higely qualified and professional persons . They are appointed on basis of merit.

7. Multiple oprations- MNC caring multiple operation such as manufacturing, marketing, finance, advertisement, marketing and research etc.

8. Better standard of living:- MNC contribute in batter standard of living in two ways (i) By providing employment (ii) by providing quality of product at low cost.

9. Transfer of resources:- MNC helps to transfer the resources such as modern technology, skilled and professionals person, raw material etc from advance country to those country in which they operate there activities.

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How do MNCs control their production in other countries?

(i) MNCs set up offices and factories for production in regions where they can get cheap labour and other resources. (ii) This is done so that the cost of production is low and the MNCs can earn greater profits. (iii) At times, MNCs set up production jointly, with some of the local companies in these countries. (iv) Its twin benefits are-they can provide money for additional investments like buying of new machines for faster production and MNCs might bring with them the latest technology for production. (v) The most common route for MNC investments is to buy up local companies and then to expand production. MNCs with huge wealth can quite easily do so. (vi) Large MNCs in developed countries place orders for production with small producers. Garments, footwear, sports items, are examples of industries where production is carried out by a large number of small producers around the world. (vii) The products are supplied to the MNCs which then sell these under their own brand names to the customers.


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