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Class : 11
Unit : Business


Show the advantages / merits of multinational company.

Ans : The advantage/ merits of multinational company are presented below: i) Huge capital and modern technology:- Multinational company contribute huge capital for the operation of the company and for the production of mass and qualitative product it is modern technology which reduce the cost per unit cost of production. ii) Mass and qualitative product:- For mass and quality production, it mobilize skilled and efficient manpower and modern technology and plant in production process. Mass production minimizes for unit cost of product whereas qualitative product help to maintain brand name in the society. iii) Efficient management:- The main reason of success of any company is its efficient management system. So, for the efficient management, a multinational company hires professional manager and introduces modern system of Management. iv) Minimum cost of production:- The multinational companies produce goods in huge quantity which increases the trade of return and minimizes in the cost of production. Low cost of production is the major benefit for multinational companies. v) Research and development:- The development of any companies is the result of research and development. Research and development helps to introduce new product, service, knowledge and management system in the society. vi) Employment opportunities:- A multinational company requires a large number of employees to operate its activities. It provides more employment opportunities to the people according to their skill and knowledge. It also helps to increase living standard of the people. vii) Maximize government revenue:- A multinational company is a large scale business. So it pays a large amount of duties, income tax, vat, etc. to government. Therefore government revenue is maximized due to operation of such companies viii) Maintain balance in trade:- Multinational companies contribute to maintain balance in international trade of host country. They produce product in host country which may substitute for import. This helps to minimize import and can save foreign currency.
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