Question

MNCs set up control in the production process in a foreign country by ____ .
(i) directly setting up offices and and factories.
(ii) taking over the production of local companies
(iii) placing orders from small producers
(iv) investing in assets such as machinery and land

• A. (i), (ii), (iii) only
• B. (i), (ii), (iv) only
• C. (i), (iii), (iv) only
• D. (i), (ii), (iii), (iv)

Answer 1

The correct option is D (i), (ii), (iii), (iv)

Multinational Corporations (MNCs) set up their factories or production units close to markets where they can get desired type of skilled or unskilled labour at low costs along with other factors of production. After ensuring these conditions MNCs set up production units in the following ways :

• Jointly with some local companies of the existing country.
• Buy the local companies and then expand its production with the help of modern technology.
• They place orders for small producers and sell these products under their own brand name to the customers worldwide.