Explain any five strategies adopted by the MNCs to earn more profit
Answers
-Mnc must be set up near markets
-It should be set up where the can find skilled labour at low costs
-It should be set up where availability of other factors of production is assured
-they look for government policies that look after their interests.
Explanation:
(1) MNCs set up joint production units with localcompanies, which helps them to save money to invest in other sectors or buy new machineries or technology.This joint production also helps them to capture the existing market of the localcompanies.
(2) MNCs might look for government policies that look after their interests.To sell products globally it should be produced globally to meet the wide market. It helps to save time and money.
(3) Companies are able to cut down the cost of production to maximize the profit. As cost of raw materials cannot be reduced, they tried to cut labour costs.In order to compete in the world market exporters try and cut labour costs.
(4) Where earlier a factory used to employ workers on a permanent basis, now they employ workers only on a temporary basis so that they do not have to pay workers for the whole year and they do not have to pay any service benefits.
(5) Workers also have to put in very long working hours and worknight shifts on a regular basis during the peak season. Wages are low and workers are forced to work overtime to make both ends meet.Workers are denied their fair share of benefits as manufacturers are always on the look out for cheaper labour.