Question

Long answer questions.

What is Multinational company? Explain its features

Answer 1

Multinational corporations (MNCs) are enterprises with operations in more than one country. They are huge industrial organisations in terms of size, range of products, use of advanced technologies and sophisticated marketing strategies.
Features of MNCs.

i. Huge capital resources: MNCs have huge resources, as they are capable of generating capital from all over the world. As they have goodwill, they can also borrow from international banks and from a large number of investors, who are willing to invest in them for huge returns.

ii. Foreign collaborations: MNCs generally enter the foreign markets with the help of local private companies. They frame business prospective and plan strategies at the global level so as to take advantage of the opportunities lying in foreign markets.

iii. Advanced technology: These companies invest huge amounts in research and development of technology. Thus, new technology helps them increase their efficiency and attain a superior position in the market.

iv. Product innovation: Multinational corporations have refined research and development centres for the innovation of new products. This helps them survive in the market and retain their large consumer base.

v. Centralised control: MNCs exercise centralised control. Thus, the management and control of MNCs lie in the hands of the parent company, i.e. the headquarters.