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$\large \bf \it \underline\blue{What \: are \: MNCs \:? }$
$\large \bf \it\underline \blue{Write \: their \: functions.}$

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Answer 1

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Multinational Companies or Corporations – MNC

Multinational Corporation – MNC, the name in itself is pretty self-explanatory. It is a company or a corporation that operates in many countries. So it has business activity in more than one country at any given time.

So let us look at a more technical definition of an MNC. A multinational corporation is a company incorporated in its home country (country of origin) but it carries out business operations beyond that country in many other foreign countries, we call the host countries. Its head office will be in the home country.

Features of a Multinational Company – MNC

1. High Turnover and Many Assets

MNCs operate on a global scale. Which means they have huge assets in almost all countries in which they operate. Their turnovers can also be incomprehensibly large. For example, Apple has a market capitalization of 1 trillion dollars. This is bigger than the entire economy of Saudi Arabia!

2. Control

MNCs have unity of control. So while they have many branches in many countries, the main control will remain with the head office in its country of origin. The business operations in the host country have their own management and offices, but the ultimate control will still remain at the head office.

3. Technological Advantages

As we saw earlier, an MNC has at its disposal huge amounts of wealth and investments. This allows them to use the best technology available to boost their products and their company. Most companies also invest huge money in their Research & Development Department to invent and discover new technological marvels.

4. Management by Professionals

An MNC is run by very competent and capable individuals. They have suitable managers take care of their business operations, technology, finances, expansion etc. And they are also able to attract the top talent to their corporations due to their resources and their reputations.

5. Aggressive Marketing

MNCs can spend a lot of their money on marketing, advertising, and promotional activities. They target an international audience, so effective marketing becomes necessary. Aggressive marketing allows them to capture the market and sell their products globally.

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Answer 2

Answer:

A multinational corporation or multinational enterprise is an organization that owns or controls production of goods or services in one or more countries other than their home country. 

The distinctive features of multinational companies are as follows.

1. Large Size:

A multinational company is generally big in size. Some of the multinational companies own and control assets worth billions of dollars. Their annual sales turnover is more than the gross national product of many small countries.

2. Worldwide operations:

A multinational corporation carries on business in more than one country. Multinational corporations such as Coco cola has branches in as many as seventy countries around the world.

3. International management:

The management of multinational companies are international in character. It operates on the basis of best possible alternative available any where in the world. Its local subsidiaries are managed generally by the nationals of the host country. For example the management of Hindustan Lever lies with Indians. The parent company Unilever is in The United States of America.

4. Mobility of resources:

The operation of multinational company involves the mobility of capital, technology, entrepreneurship and other factors of production across the territories.

5. Integrated activities:

A multinational company is usually a complete organisation comprising manufacturing, marketing, research and development and other facilities.

6. Several forms:

A multinational company may operate in host countries in several ways i.e., branches, subsidiaries, franchise, joint ventures. Turn key projects.

Now your question asks "What they do ?"

Multinational companies make investments in different countries with the following aims :-

(1). To take tax benefits in host countries

(2). To exploit the natural resources of the host country

(3). To take advantage of Government concessions in host country;

(4). To mitigate the impact of regulations in the home country;

(5). To reduce cost of production by making use of cheap labor and low transportation expenses in the host country.

(6). To gain dominance in foreign markets;

(7). To expand activities vertically.