Question
Explain the four advantages of being a MNC.

Answer

The advantages of being an MNC is:
i. Huge Capital Resources: These enterprises are characterized by possessing huge financial resources and the ability to raise funds from different sources. They are able to tap funds from various sources. They may issue equity shares, debentures or bonds to the public. They are also in a position to borrow from financial institutions and international banks. They enjoy credibility in the capital market.
ii. Foreign Collaboration: Global enterprises usually enter into agreements with Indian companies pertaining to the sale of technology, production of goods, use of brand names for the final products, etc. These MNCs may collaborate with companies in the public and private sector.
iii. Advanced Technology: These enterprises possess technological superiorities in their methods of production. They are able to conform to international standards and quality specifications. This leads to the industrial progress of the country in which such corporations operate since they are able to optimally exploit local resources and raw materials. Computers and other inventions have come due to the technological advancements provided by MNCs.
iv. Product Innovation: These enterprises are characterized by having highly sophisticated research and development departments engaged in the task of developing new products and superior designs of existing products. Qualitative research requires huge investment which only global enterprises can afford.

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