MNC Stands for Multinational Company. A company that is well-established and have their branches in two or more than two countries. Many businesses are there in a nation that are capable to extend their business to an international level should be considered MNCs. MNCs helps to develop national pride and gives employment to a number of peoples in different countries which also helps to grow the GDP. There are many MNCs like Microsoft, Accenture, Intel, Coca-Cola, KFC, etc.
Characteristics of MNC
- In the different ranges of sectors, there are MNCs. MNCs are present in a different range of sectors like the IT industry, beverage industry, food industry, automobile, etc.
- MNCs are getting increased on a global scale by globalization which is helping to integrate economically and culturally.
- The place where the headquarter of the multinational companies are located is to be the home country. The home country is considered to be the host country if any international company starts its operation in that country.
- MNCs create an impact on the economy of the country. It also generates jobs and pays taxes to the country which converts a developing country to a developed country.
History of MNC
In the 1920s first MNCs were established. In the 1950s and 1960s, many more MNCs were established from the US to Worldwide like Western Europe. Japan became an economically powerful industry between the 1950s and 1960s. MNCs became a notable feature because governments in countries imposed high rates of tariffs on imports that MNCs are forced to build their manufacturing factories and become domestic producers.
Advantages of MNC
- MNCs can reduce production costs by using local labor and raw materials.
- Production of good quality products is possible which can become useful for customers.
- MNCs, help to decrease the price of the product and also innovate new things.
- It also helps to improve the standard of living of the people and it grows the economy of the country.
- It builds capital in an efficient way.
Disadvantages of MNC
- Laborers get exploited by MNCs. Laborers do hard work and MNCs earn profit from that but give low remuneration to them for that.
- Pollution gets increased by industry wastage or by raw materials which exploit natural resources.
- Countries’ freedom gets indirectly dominated because the host country is the place where MNCs build their assets.
- Local Companies are getting huge losses because of MNCs.