Skip to content
Related Articles
Open in App
Not now

Related Articles

What is the role of MNC’s in Globalization Process?

Improve Article
Save Article
  • Last Updated : 03 Aug, 2022
Improve Article
Save Article

Connecting a country’s economy with the economies of other countries under conditions of open business and flow of capital, as well as the cross-border movement of people. MNCs play a critical role in progressing the globalization process. The order to achieve success in investments and commerce contributes to the connectivity of different nations.

Globalization provides developed-country corporations with a competitive advantage.Globalization benefits developing countries as well since they are more cost-effective and so attract jobs. Increasing commodities and services, capital, and technology are being transferred across nations. There is one more method for the countries to be linked. This is achieved through international migration.

The three major forms of globalization are political, economic, and cultural globalization. Through the cross-border movement of products, capital, and labor, globalization has produced new employment and economic growth. However, development and employment generation are not evenly distributed among businesses or countries.

Multinational Corporations (MNCs)

An MNC is a multinational company that controls and operates production in more than one country. Multinational Corporations or Multinational Companies are enterprises that operate in more than one country other than their native country. Multinational Corporations (MNCs) have a central head office in their home country and secondary offices, facilities, factories, industries, and other assets in other nations.

Since these businesses operate on a global scale, they are sometimes referred to as global enterprises. The main business controls and operates the operations on a global scale. MNCs’ products and services are offered in several countries, demanding global management. Multinational corporations may have a significant impact on local economies and even the global economy, as well as play a significant part in international relations and globalization. Superior technology, a worldwide management and distribution system, and a vision of the world and goal are just a few of this company’s characteristics.

Importance of multinational corporations in the globalization process

  1. MNCs establish production offices and factories in areas with inexpensive labor and other resources.
  2. MNCs will sometimes set up manufacturing in cooperation with local businesses from across the world. The local company benefits from such collaborative manufacturing in two ways. First, MNCs might contribute funds for further expenditures in order to increase production speed. Second, MNCs provide the most recent technology for expanding and improving output.
  3. Several multinational corporations are so large that their wealth exceeds the entire budgets of some underdeveloped countries. This is why they acquire local businesses in order to expand output.
  4. MNCs establish control over production by placing orders with small businesses in emerging countries.
  5. They operate as platforms for improved technological transmission. 
  6. They have given developing countries modern technology, manufacturing processes, and increased skills.
  7. They help in the transfer of capital from nations where it is plenty to those where it is lacking.
  8. They contribute to the expansion of knowledge and the development of human resources.
  9. MNCs not only market their products globally, but they also manufacture their services and products internationally.
  10. The manufacturing process is divided into little sections and shared globally.
  11. It has resulted in bridge commercial and development convergence.
  12. They contribute to the creation of large-scale job possibilities by establishing branches and affiliates.
  13. MNC activities have a positive impact on the host country’s balance of payments account.

Frequently Asked Questions

Question 1: What are the MNCs?

Answer:

An MNC is a multinational company that controls and operates production in more than one country. Multinational Corporations or Multinational Companies are enterprises that operate in more than one country other than their native country. Multinational Corporations (MNCs) have a central head office in their home country and secondary offices, facilities, factories, industries, and other assets in other nations.

Since these businesses operate on a global scale, they are sometimes referred to as global enterprises. The main business controls and operates the operations on a global scale. MNCs’ products and services are offered in several countries, demanding global management.

Question 2: Write about some features of Globalisation.

Answer:

  1. Connecting a country’s economy with the economies of other countries under conditions of open business and flow of capital, as well as the cross-border movement of people. MNCs play a critical role in progressing the globalization process. The order to achieve success in investments and commerce contributes to the connectivity of different nations.
  2. Globalization provides developed-country corporations with a competitive advantage.
  3. Globalization benefits developing countries as well since they are more cost-effective and so attract jobs.
My Personal Notes arrow_drop_up
Related Articles

Start Your Coding Journey Now!