GLOBALISATION_MNC

​​The given MNCs are headquartered in which countries? What are the  common features that makes them an MNC?

​Chapter: Globalisation and the Indian Economy

Topic: Multinational Corporations​

LEARNING OBJECTIVES

​•Examine the factors considered by MNCs for setting up production in other countries.

•Analyse the methods used by MNCs to interlink production across countries.

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​Task 1 – Case Study

Examine the factors considered by MNCs for setting up production in other countries.

•Analyse the methods used by MNCs to interlink production across countries.​

​Ford Motors, an American company, is one of the world’s largest automobile manufacturers with production spread over 26 countries of the world. Ford Motors came to India in 1995 and spent Rs. 1700 crore to set up a large plant near Chennai. This was done in collaboration with Mahindra and Mahindra, a major Indian manufacturer of jeeps and trucks. By the year 2017, Ford Motors was selling 88,000 cars in the Indian markets, while another 1,81,000 cars were exported from India to South Africa, Mexico, Brazil and United States of America. The company wants to develop Ford India as a component supplying base for its other plants across the globe.

​Group 1&2

Would you say Ford Motors is a MNC? Why? What are the features that makes an MNC?

Group 3&4

Why do you think the company wants to develop India as a base for manufacturing car components for its global operations? Discuss the following factors: (a) cost of labour and other resources in India (b) the presence of several local manufacturers who supply autoparts to Ford Motors (c) closeness to a large number of buyers in India and China

Group 5&6

In what ways will the production of cars by Ford Motors in India lead to interlinking of production?

What are the different ways in which MNCs spread production in other countries?

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Multiple Choice

“MNCs keep in mind certain factors before setting up production”. Identify the INCORRECT option from the choices given below.

• Availability of cheap skilled and unskilled labour

• Proximity to markets

• Presence of a large number of local competitors

• Favourable government policies

Multiple Choice

Why do MNCs set up offices and factories in more than one nation?

• The cost of labour will be high in other countries where they set up production

• The MNCs want other countries around the world to grow and develop

• The cost of production will be low in other regions and the MNCS can earn greater profit

• The MNCs want to make their presence felt globally

​INDEPENDENT PRACTICE POSTED IN TEAMS

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Multiple Choice

Entry of MNCs in a domestic market may prove harmful for

• Large scale producers

• All domestic producers

• substandard domestic producers

• All small-scale producers

Multiple Choice

Which one of the following is a major benefit of joint production between a local company and a Multi-National Company?

• MNC can bring latest technology in the production

• MNC can control the increase in the price

• MNC can buy the local company

• MNC can sell the products under their brand name