Question

What is multinational ?

Answer 1

MNC ( Multi-National Company ) ---> Companies which operate in different countries are known as Multinational companies . These companies carry on their business activities in different countries across the globe.

Multinational corporations are also known as ' Global enterprises '. Some examples of MNC's are :-

✦ Mc Donald's
✦ Sony
✦ Adidas
✦ Coca Cola
✦ Hindustan Unilever Ltd.etc.


► Characteristics of MNC's :

A multinational operates through network of branches spread across various host countries. it has production , marketing and other facilities in several countries. These enterprises use sophisticated technology in their methods of production. Innovative products manufactured by multinational corporations help in increasing the standard of living of people living in host countries.

► Benefits of MNC's :

Multinationals have positive as well as negative impacts on the economy of host country. The benefits are as follows :-

◆ MNC's provides employment opportunities to the host countries and helps in increasing their income levels.

◆ MNC's helps the people in host countries to improve their standard of living. It provides them with innovative and technologically superior products which enhances their quality of life.

◆ MNC's increases competition, they compel domestic companies to improve their efficiencies or withdraw from the market.

◆ MNC's acts as vehicle for transfer of the advanced technology and improved skills which helps in improving the quality of products manufactured.

► Criticisms of MNC'S :

Through, MNC's acts as a dynamic force in development of economy in host country, they also have certain negative impacts on them :

◆ MNC's cause fast depletion of non- renewable natural resources in the host countries.

◆ MNC's invest only in profitable areas and do little for underdeveloped sectors & backward areas. hence, it fails to solve problems like :- poverty, illiteracy, and unemployment.

◆ MNC's kills domestic enterprises which eliminates competition.

◆ MNC's bring foreign culture which affects lifetyle, Habits of food, work culture of people living in host countries. eg ;- Fast foods, have become popular among people of India.

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Answer 2

   Multinational means related to or belonging to or pertaining to multiple nations.

   Multinational organization is a private organization or a cooperative union of governmental or private or voluntary organizations.

   Multinational companies have their branches in multiple countries. They provide world class products. They also take advantage of local skills, cheap labor, land and infrastructure to build their manufacturing units.

   Multinationals provide employment to some and throw out many local small scale vendors out of market. It is believed that multinationals bring in a lot of funds and investments into the country. It is true that multinationals indicate influence of private companies over local economy. Their primary objective is profit by any and all means. They are also partially responsible for pollution around their manufacturing units.

   Thus there are both disadvantages and advantages. Government, SEBI and other supervising agencies must be alert to check exploitation by multinationals.  Stock exchange is often disturbed by big scams and plans by multinationals.

   Globalization of a country happens through multinational companies.

   In the last two decades many Indian organizations have gone global and earned big names their respective markets.  Tata , Birla, Reliance, Mittal are only some examples. Also many telecom companies of India including BSNL and NTPC have internationational markets.