Question

Explain 5 conditions that helps the mncs to set up a production unit in another country.

Answer 1

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Answer 2

1. MNC's set up production in countries where there is ample of availability of skilled and unskilled labour at a low cost. In order to get a hold of the market as well as for profit, they generally look for investment options in developing countries like India.

2. The laws of a country relating to setting up of production and proximity of the market are also crucial factors in determining the set up of production.

3. MNC's also require trained personnel and professionals in particular fields. For example the increasing set up of many call centers and BPO's (Business Process Outsourcing) has led to a significant rise in demand for people having good communication skills.