Question

How MNCs have changed the pattern of production across the globe?

Medium

Solution

Verified by  GMS

Until the middle of the twentieth century, production was largely organised within countries. Colonies such as India exported raw materials and food stuff and imported finished goods. Trade was the main channel connecting distant countries.
This was before large companies called multinational corporations (MNCs)emerged on the scene. A MNC is a company that owns or controls production in more than one nation. The companies set up offices and factories for production in regions where they can get cheap labour and other resources. This is done so that the cost of production is low and the MNCs can earn greater profits.
the goods and services are produced globally. Asa result, production is organised in increasingly complex ways. The production process is divided into small parts and spread out across the globe. MNCs set up production where it is close to the markets; where there is skilled and unskilled labour available at low costs; and where the availability of other factors of production is assured. In addition, MNCs might look for government policies that look after their interests.