How are multinational corporations (MNCs) controlling and spreading their productions across the world? Explain.
MNC is not only selling its finished products globally, but more important, the goods and services are produced globally. MNCs set up production where it is close to the markets; where there is skilled and unskilled labour available at low costs; where the availability of other factors of production is assured. In addition, MNCs might look for government policies that look their interests. MNCs also set up production jointly with some of the local companies of the respective countries.
There’s another way in which MNCs control production. Large MNCs in developed countries place orders for production with small producers. The products are then supplied to the MNCs, which they sell these under their own brand names to the customers. By setting up partnerships with local companies, by using the local companies for supplies, by closely competing with the local companies or buying them up, MNCs are exerting a strong influence on production at these distant locations.
