Operating Characteristics of MNCs


Operating Characteristics of MNCs:


  • MNCs can reduce their sourcing and distribution costs compared to National Business, can avoid tariffs, quotas and other trade barriers faced by exporters and are also able to periodically shift operations from high cost to low cost countries.


  • Number of top jobs in MNCs will be allocated to the nationals for various foreign countries.


  • MNCs operations are located wherever there is a market for selling the goods, wherever there is a skill to develop the technologies and wherever there are facilities for research and development.


  • MNCs success or failure depends on global conditions and decisions and not relating to a particular state.


  • Decisions on MNCs are taken on the basis of global alternatives.


  • MNCs operate as per the laws of countries in which they operate. MNCs may undertake manufacturing or service activities. They also offer turnkey projects to their clients. They have to honor laws of the countries in which they operate.


  • MNCs conduct their business and management very efficiently. MNCs are managed by highly qualifies and experienced staff. This facilitates rapid expansion of their activities in developing countries.

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