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What are MNCs? How the MNCs functions? What are the main guiding factors of MNCs?


MNCs are Multinational corporations. It is a company that owns or controls production in more than one 

Nation. MNCs set up offices and factories for production in region where they can get cheap labour and
other resources, closer to the markets.

This is done to reduce the cost of production and the MNCs can
earn greater profits. MNCs not only sell its finished products globally but also the goods and services are
produced globally. The production process is divided into small parts and spread across the globe.

The main guiding factors of MNCs are:
(i) Cheap production
(ii) Closeness of production unit to the markets.
(iii) Favourable government policies.

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