TN State Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs)

Question 1.
Define Multinational Company.
Answer:
“A multinational corporation owns and manages business in two or more countries.” -Neil HJacoby
“MNC is defined to be an enterprise operating in several countries but managed from one country”.

Question 2.
Write any two advantages of MNC.
Answer:
Low cost labour:
MNC set up their facilities in low cost countries and produce goods/ service at lower cost. It gains cost advantage and sells its products and services of good quality at low cost.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs)

Quality products:
The resource experience and expertise of MNC in the sphere ofresearch and development enables the host country to establish its research and development system which helps it in producing quality goods and services at least possible cost.

Question 3.
Give two examples of MNC.
Answer:

TN Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs) 1

Question 4.
Name the type of business enterprise which operates in more than one country.
Answer:

TN Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs) 2

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs)

Question 5.
What are the advantages of MNC’s?Answer:
Advantages of MNC:
(i) Labour:
MNC set up their facilities in low cost countries and produce goods/service at lower cost. It gains cost advantage and sells its products and services of good quality at low cost.

(ii) Quality Products:
The resource, experience and expertise of MNCs in the sphere of research and development enables the host country to establish its research and development system which helps it in producing quality goods and services at least possible cost.

(iii) Proper Use of Idle Resources:
Because of their advanced technical knowledge, MNCs are in a position to properly utilise idle physical and human resources of the host country. This results in an increase in the Nationalfncome of the host country.

Question 6.
What are the disadvantages of MNC’s?
Answer:
Disadvantages of MNC’s
(i) Danger for Domestic Industries:
MNCs, because of their vast economic power, pose a danger to domestic industries; which 1 are still in the process of development. Domestic industries cannot face challenges posed by MNCs. Many domestic industries have to wind up, as a result of threat from MNCs. Thus MNCs give a setback to the of economic growth host countries.

(ii) Transfer of Outdated Technology:
Where MNCs transfer outdated technology to host nation, it serves no purpose.

(iii)No Benefit to Poor People:
MNCs produce only those things, which are used by the rich. Therefore, poor people of host ) countries do not get, generally, any benefit, out of MNCs.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs)

Question 7.
Name any 2 Indian Multinational Companies in abroad?
Answer:

  1. Indian MNC in abroad.
  2. Suzuki Marathi Suzuki
  3. Timex Timex watches.

Question 8.
Name any 2 Foreign Companies in India?
Answer:

  1. Coca-cola corporation.
  2. International Business Machine.

Question 9.
Multinational companies establish themselves in developing countries to enjoy huge profits by selling consumer goods or luxury items. They start business by offering wide variety of goods at prices cheaper than local retailers offer. But once they are established they increase prices.

(i) State the values the government of a developing country ignores while allowing MNCS to establish in their country.
Answer:

  1. MNC’s produce only those things which are used by the rich, poor people do not get any benefits.
  2. MNC leads to use natural resources of the host country carelessly.
  3. MNC’s tend to promote their culture in home country.
  4. Many domestic industries have to windup, as a result of threat from MNC’s.

(ii) What value do the MNCs violate?
Answer:

  1. Neglect of Industrial and Economic growth of home country.
  2. An investment in home country is not profitable.
  3. Money value also decreased

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs)

Question 10.
Public enterprises are established to achieve the goal of economic and social development of the country. They are managed and controlled by Central or State Governments through ministers or government officials. Many times their poor performance i influences the policy formulation and running of the enterprise into loss. Even the big business houses use their influence and get the policies formulated in their favour. State the role of ministers or government to frame the policies for the success of public enterprises.
Answer:

  1. Government policies favourable towards N public enterprise.
  2. Public and human resources also developed in our country.
  3. By providing good services to increase profit.
  4. Government must frame the policies for the success of public enterprise.
  5. No one Can misuse these policies for personal use.
  6. National income will raise by starting MNC’s in home country.

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs)

Choose the Correct Answer:

Question 1.
A Multinational Corporation can be defined as a firm which:
(a) is beyond the control of any government
(b) is one of the top 200 firms in the world
(c) owns companies in more than one country
(d) all. the above
Answer:
(c) owns companies in more than one country

Question 2.
Centralised control in MNC’s implies control exercised by:
(a) branches
(b) subsidiaries
(c) headquarters
(d) parliament
Answer:
(c) headquarters

Question 3.
Enterprises operating in several countries but managed from one country is termed as:
(a) government company
(b) multinational company
(c) private company
(d) joint venture
Answer:
(b) multinational company

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs)

Question 4.
Dispersal of decision making power to branches/affiliates/subsidiaries by head office represents:
(a) centralisation
(b) decentralisation
(c) power
(d) integration
Answer:
(b) decentralisation

Question 5.
Coca-Cola company is an example of:
(a) MNC
(b) government company
(c) joint venture
(d) public company
Answer:
(a) MNC

Samacheer Kalvi TN Board 11th Commerce Important Questions Chapter 8 Multi-National Corporations (MNCs)

Samacheer Kalvi 11th Commerce Notes Chapter 8 Multi-National Corporations (MNCs)

→ The business is coming to realize that education is to business what fertilizer is to farming.

→ The term “ multinational “ consists of two different words “ multi” and “national”. The prefix “multi” means “many” while the word national refers to nations or countries.

→ Multinational company may be defined as a company that operates in several countries such a company has factories, branches and in more than are country.

→ According to the united nations commission on multinational corporations, a multinational corporation is a corporation which operates, in addition to the country in which it is incorporated in one or more other countries.

→ It is also known as global giant, or “ world enterprise “ or international enterprise all forms of business organisation that transcend political frontiers may be called as multinational firms.

→ A multinational company is operated in more than one country simultaneously. It is very large in size. Its purpose is to reduce transport j cost and to make use of raw material, labour, capital and market foreign countries.
(US 60%, Asia 30% and Africa 10%) MNCS.

TN Board 11th Commerce Important Questions

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