Tamilnadu State Board New Syllabus Samacheer Kalvi 11th Commerce Guide Pdf Chapter 8 Multi-National Corporations (MNCs) Text Book Back Questions and Answers, Notes.

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

11th Commerce Guide Multi-National Corporations (MNCs) Text Book Back Questions and Answers

I. Choose the Correct Answer

Question 1.
A Multinational Corporation can bedefined 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

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

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

Question 4.
Dispersal of decision making power tobranches/affihiates/subsidiaries by head office represents ………..
a) Centralisation
b) Decentralisation
c) Power
d) Integration
Answer:
b) Decentralisation

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

Question 5.
Coca-Cola Company is an example of ………………
a) MNC
b) Government company
C) Joint Venture
d) Public company
Answer:
a) MNC

II. Very Short Answer Questions

Question 1.
Define Multinational Company.
Answer:
“A multinational corporation owns and manages the business in two or more countries.” – Neil H. Jacoby

Question 2.
Write any two advantages of MNC.
Answer:

  1. End of Local Monopolies
  2. Quality product

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

Question 3.
Give two examples of MNC.
Answer:

  1. Coca – Cola Corporation
  2. Unilever

Question 4.
Name the type of business enterprise which operates in more than one country.
Answer:
Multi-National Corporation can be operated in more than one country.

III. Short Answer Questions

Question 1.
What are the advantages of MNC’s?
Answer:
1. Low-Cost Labour:
MNC set up their facilities in low-cost countries and produce goods/services at a lower cost. It gains a cost advantage and sells its products and services of good quality at low cost.

2. 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 the least possible cost.

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

4. Improvement in Balance of Payment Position:
MNCs help the host countries to increase their exports. As such, they help the host country to improve upon its Balance of Payment position.

5. Technical Development:
MNCs carry the advantages of technical development to hosting countries. In fact, MNCs are a vehicle for the transference of technical development from one country to another. Because of MNCs poor host countries also begin to develop technically.

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

Question 2.
What are the disadvantages of MNC’s?
Answer:

  • Domestic Industries cannot face the challenges posed by MNCs.
  • It does not give any benefit to poor people.
  • It creates a danger to Independence.
  • There is a chance of careless exploitation of natural resources.

IV. Long Answer Questions

Question 1.
What are all the Advantages, of MNC?
Answer:
1. Low-Cost Labour:
MNC set up their facilities in low-cost countries and produce goods/services at a lower cost. It gains a cost advantage and sells its products and services of good quality at low cost. This is not available to smaller companies which operate at the regional level.

2. 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 the least possible cost.

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

4. Improvement in Balance of Payment Position MNCs help the host countries to increase their exports. As such, they help the host country to improve upon its Balance of Payment position.

5.Technical Development:
MNCs carry the advantages of technical development in 10 host countries. In fact, MNCs are a vehicle for the transference of technical development from one country to another. Because of MNCs poor host countries also begin to develop technically.

6. Managerial Development
MNCs employ the latest management techniques. People employed by MNCs do a lot of research in management. In a way, they help to professionalize management along the latest lines of management theory and practice. This leads to managerial development in host countries.

7. Promotion of international brotherhood and culture MNCs integrate economies of various nations with the world economy. Through their international dealings, MNCs promote international brotherhood and culture; and pave way for world peace and prosperity.

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

Question 2.
What are all the Disadvantages of MNC?
Answer:
The danger for Domestic Industries
MNCs, because of their vast economic power, pose a danger to domestic industries; which 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 threats from MNCs. Thus MNCs give a setback to the economic growth of host countries.

Transfer of Outdated Technology
Where MNCs transfer outdated technology to the host nation, it serves no purpose

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.

Danger to Independence
Initially MNCs help the Government of the host country, in a number of ways; and then gradually start interfering in the political affairs of the host country. There is, then, an implicit danger to the independence of the host country, in the long-run. Deprivation of Job Opportunity of Local People MNCs may not generate job opportunities for the people of their home country.

Misuse of Mighty Status
MNCs are powerful economic entities. They

Selfish Promotion of Alien Culture
MNCs tend to promote alien culture in the host country to sell their products. They make people forget about their own cultural heritage. In India, e.g. MNCs have created a taste for synthetic food, soft drinks, etc. This promotion of foreign culture by MNCs is injurious to the health of people also.

Neglect of Industrial and Economic Growth of Home Country
An investment in host countries is more profitable, MNCs may neglect home countries’ industrial and economic development.

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