Explain any four ways in which Multi-National Corporations have spread their production and interaction with local producers in various countries across the globe.
Multi-National Corporations have spread their production and interaction with local producers in various countries across the globe
MNCs set up production where it is close to the markets and where there is skilled and unskilled labour available at low costs.
- MNCs set up production jointly with some of local companies of that countries.
- MNCs can provide money for additional investments like buying new machines for faster production.
- MNCs might bring with them the latest technology for production.
- The most common route for MNC investments is to buy up local companies and then expand production.
- There is another way in which MNCs control production. Large MNCs in developed countries place order for production with small producers where production is carried out by a large number of small producers.
- The products are supplied to the MNCs which then sell these under their own brand
names to the customers.
- These large MNCs have tremendous power to determine price, quality, delivery and labour conditions for these distant producers.
- Thus, there are a variety of ways in which MNCs are spreading their production and interacting with local producers in various countries across the globe.