What is MNC? How do MNCs organise production? 
A multinational corporation (MNC) or multinational enterprise (MNE) is a corporation enterprise that manages production or deliversservices in more than one country. It can also be referred to as an international corporation. The International Labour Organization has defined an MNC as a corporation that has its management headquarters in one country, known as the home country, and operates in several other countries, known as host countries.
Some multinational corporations are very big, with budgets that exceed some nations' gross domestic products . Multinational corporations can have a powerful influence in local economies, and even the world economy, and play an important role in international relations and globalization.
A multinational corporation (MNC) or multinational enterprise (MNE) is a corporation enterprise that manages production or deliversservices in more than one country. It can also be referred to as an international corporation. The International Labour Organization (ILO) has defined an MNC as a corporation that has its management headquarters in one country, known as the home country, and operates in several other countries, known as host countries.
Some multinational corporations are very big, with budgets that exceed some nations' gross domestic products (GDPs). Multinational corporations can have a powerful influence in local economies, and even the world economy, and play an important role in international relations and globalization.
MNCs are companies that have their branches or manufacturing units in more than one nation. MNCs establish their factories and offices in regions where cheap labour, raw material and other resources are readily available. This minimizes the cost of production and increases the profit.
MNCs invest in other countries to lower their cost of production in order to earn maximum profits. This investment can be done in three ways. First, the MNC establishes itself on its own in the new country by buying land, constructing its factory and buying machines etc. Second, MNCs set up production by entering into joint ventures with some of the local companies of that country. Third, MNCs can buy a local company having considerable market share in that country. This enables an MNC to expand production on an already-created base.
MNCs organise their production by setting different plants in different countries.This reduces the expenditure of MNCs by 50-60%.
For eg. In a US based mobile MNC the designing of the phone takes place in the US,its components are manufactured in Mexico,they are shipped to China where they are assembled,these phones are sold over the worldand the call centres are present in india
A multinational company (MNC) is a business that has operations in more than one country.
Note that a business does not become an MNC simply because it sells its goods and services to more than one country. The key to being an MNC is that the business has business operations in two or more countries.
Key Reasons for the Growth of MNCs
There are many reasons why a business may wish to become an MNC and these factors have also fuelled the rapid growth of MNCs in recent. decades. These reasons include:
To Operate Closer to Target International Markets
Producing closer to target markets has several potential advantages, including reduced transport costs (which will be important for bulky goods) and improved market information and intelligence.
Gaining access to lower costs of production
Many MNCs have taken advantage of lower production costs from operating in developing economies. In some cases this can be achieved by outsourcing and offshoring production to suppliers based in those economies. However, for other businesses, it is more beneficial to set up their own operations in order to service domestic demand as well as supply demand in the host and nearby countries. Many MNCs now have highly complex supply chains integrating their operations in many economies.
By producing in a host country, an MNC may be able to avoid restrictions on imports such as tariffs and import quotas..
Key Reasons for the Growth of MNCs
The global economy has witnessed the rapid growth of MNCs for a variety of reasons, including:
Global brands seeking to drive revenue and profit growth in emerging economies (in particularly seeking rising demand from increasingly affluent consumers).
The search for economies of scale, whereby MNCs can reduce unit costs by supplying global demand by concentrating production in a few key international locations.
The perceived need to supplement relatively weak demand in existing, developed economies.
MNCs source raw material, employ labour and set up production facilities wherever the cost or rate is lowest in order to have economic advantages. They also scale up their production into large volumes in order to attain low cost per unit produced; this is called economic scale of production. The MNCs look to set up base in countries where political, bureaucratic, governmental and other local interference is minimum, the tax system is less stringent and concessions are extended by the local government to encourage industrial growth.