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IH Notes

This document discusses multinational companies (MNCs) and their role in globalization. MNCs set up offices and factories in countries with cheap labor and resources to earn profits. They spread production globally by partnering with or acquiring local companies. This allows local companies access to investment, technology, and markets. MNCs and foreign trade facilitate the integration of markets worldwide. Factors like technology, liberalized trade policies, and organizations like the WTO have enabled increased globalization, bringing both benefits like improved standards of living but also struggles around labor rights and small business competitiveness that require addressing.

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Suryansh Aggarwal
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92 views2 pages

IH Notes

This document discusses multinational companies (MNCs) and their role in globalization. MNCs set up offices and factories in countries with cheap labor and resources to earn profits. They spread production globally by partnering with or acquiring local companies. This allows local companies access to investment, technology, and markets. MNCs and foreign trade facilitate the integration of markets worldwide. Factors like technology, liberalized trade policies, and organizations like the WTO have enabled increased globalization, bringing both benefits like improved standards of living but also struggles around labor rights and small business competitiveness that require addressing.

Uploaded by

Suryansh Aggarwal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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IH Notes

MNC(Multinational companies)
Meaning – A large company that controls production in more than one nation .

Role of MNCs-A MNC sets up offices and factories for production in part of the world where
they can get cheap labour and other resources which can benefit the company in earning
profits .

Trade – The main channel in connecting distant countries

Investment – The money that is spent to buy assets such as land , building and other
equipment’s . An investment that is made by MNC is called as an foreign investment .

MNCs spread their production through a lot of ways like interacting with local producers in
various countries across the globe :-
 By setting up partnerships with local companies
 Using local companies for supplies
 Competing with local companied or buying them

When MNCs join with local companies the local companies are benefitted in various ways
like :-
 MNCs many times provide money for investments to local companies like for
advancements and buying new machines
 MNCs might get the local companies with the latest technology

Foreign trade and integration of markets

Foreign trade create an opportunity for producers to reach beyond domestic market . Foreign
trade enable producers and buyers to sell or buy products in various countries outside the
world . Also , foreign trade enables markers or integration of markets in different countries .

Globalization- Globalization is when countries integrate and connect and MNCs play a major
role in the globalization process . This can be due to various reasons like :-
 More goods and services like investments and technology moving between countries
 Cultural diffusion and movement of people in countries

Factors Enabling Globalization

 Technology – A rapid movement in technology enables stimulated globalization as


the goods and services are delivered faster across long distances .
 Liberalization of foreign trade and foreign investment policy -Trade barriers are the
restrictions that are set by the government (rules and laws).
 These laws are made to regulate foreign trade and to decide how much quantity of
goods and services should come in a country .Ex. Tax is an example of trade barrier
 When the government removes barriers or restrictions it is known as liberalization .
WTO(World Trade Organization)

 World Trade Organization is a global organization whose aim is to liberalize


international trade .
 WTO has established rules for developed countries regarding international trade so
these countries can allow free trade for all .

Impact of globalization in India

 Provided greater choices to consumers who can enjoy improved quality and lower
prices on several products .
 Resulted in Higher standards of living

Struggles of Fair Globalization


1. Globalization ensured labour laws and they are properly implemented and the workers
get to know their rights
2. It supports local and small companies to improve their performance
3. It can use government and investment barriers
4. It can align with other developing counties with similar intrests to fight against the
domination of developed countries in the WTO .

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