What are the various ways in which mncs set up, or control, production in other countries?

Multinational Corporations (MNCs) are coming up with factories or production units close to markets where they have easy availability of 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: • MNCs are having tie-ups with local companies to capture large market share. • Acquire the local companies and then expand its production with the help of advances technology they possess. • They delegate orders to small producers and sell these products under their own brand name to the customers worldwide at a much higher price. • They get cheap labour to work for them in masses and produce large volumes to sell. • Through the above ways, MNC’s are exerting a strong influence on production at distant locations. For more answers visit to website: MNCs set up, or control, production n other countries in the following ways: (i) MNCs set up production on the basic of the following factors: (a) Closeness of the place too the markets. (b) Availability of skilled and unskilled labour at low costs. (c) Availability of other factor of production i.e. raw material etc. (d) Government’s favourable policies. (ii) After assuring above conditions, MNCs set up factories and offices for production. They but asset such as land, building, machines and other equipments.

The ways are: (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. (ii)In addition, MNCs might look for government policies that look after their interests. (iii)MNCs set up production jointly with some of the local companies of these countries.But the most common route for MNC investments is to buy up local companies and then to expand 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. Liberalization of trade and investment policies: (i)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. (ii)The products are supplied to the MNCs. But MNCs sell them 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. (iii)MNCs investment is to buy up local companies and then to expand their production. MNCs with huge wealth, can quite easily do so. USA...

Production was predominantly organised within countries, until the middle of the twentieth century. If we take into consideration the past thirty years, we can understand that the major force in the process of globalisation has been the MNCs, connecting far away parts of the world. In fact, the entire budgets of the developing country governments are lesser than the wealth of the top MNCs. Multinational Companies (MNCs) • A company that controls or owns production in more than one country is known as a MNC. • MNCs set up factories and offices for production in regions where they can get cheap resources including cheap labour. • The above actions are taken by MNCs with the objective of earning greater profits and to keep the cost of production low. MNCs – Factors that Influence Investment Decisions • Investment made by MNCs is called foreign investment • The money spent on buying assets such as machines, equipment, buildings, and land is called investment. • Earning profits is the objective behind making any investments. • MNCs set up production where the availability of various factors of production is assured, where there is availability of unskilled and skilled labour at low costs, where target markets are closeby. • In addition, government policies play a big role in the decisions of MNCs. • Once the above conditions are fulfilled, MNCs set up offices and factories for production. 3 Different Methods Used by MNCs – To Set up, or Control Production • By using the loc...

Multinational corporations (MNCs) usually set up their production units, where they found lucrative business conditions like- business friendly government policies, economical skilled labour, proximity to the market and so on. In this regard, MNCs control production in following ways- Various ways in which MNCs control production in other countries: (i) Forging partnerships with local companies: By doing this MNCs, bring in required capital and expertise in the running of local company. In addition, in certain scenarios, latest technologies are also shared, which increases the overall productivity of the concerned business. (ii) Competing with local companies or buying them up: Owing to their large capital base, MNCs often end up buying the local companies, or weed them out of business. (iii) Outsourcing of required inputs: MNCs often uses the products of local company for making their product. E.g. in garments, footwear, sports items, etc. The products are supplied to MNCs which have great power to determine price, quality, delivery and labour conditions for these distant producers. 11 Fill in the blanks Indians buyers have a greater choice of goods than they did two decades back. This is closely associated with the process of ____(a)____ Markets in Indian are selling goods produced in many other countries. This means there is increasing ____(b)____ with other countries. Moreover, the rising number of brands that we see in the markets might be produced by MNCs in India. M...

The various ways in which MNCs set up or control production in other countries are (a) Buy up a local production company. (b) Place orders for production with small producers, i.e., contract manufacturing. (c) By setting up a partnership (joint venture) with a local company. (d) Setting up their wholly owned subsidiary in the other country. (e) By licensing or franchising their brand to a local company.

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The various ways in which MNCs set up, or control, production in other countries are by buying out domestic companies or making the latter work for them. Sometimes, MNCs buy mass produce of domestic industries, and then sell it under their own brand name, at much higher rates, in foreign countries. MNCs look towards developing nations to set up trade because, in such places, the labour and manufacturing costs are much lower.