large mnc's have tremendous power to control price delivery quality at the distant market . Explain
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Answer:
How do Multinational Companies (MNCs) control production?
Control of production by MNCs:
(i)MNCs set up production where it is close to the markets; where there is skilled and unskilled labour available at low costs; and where the availability of other factors of production is assured. In addition, MNCs might look for government policies that look after their interests.
(ii)MNCs set up production jointly with some of the local companies of these countries. The benefit to the local company of such joint production is two-fold.
(iii)First, MNCs can provide money for additional investments, like buying new machines for faster production. Second, MNCs might bring with them the latest technology for production.
(iv)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.
(v)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.