Assertion: Multinational companies help in the growth of local compani...
Multinational companies may help and invest in the local companies giving them another dimension to expand. However, possible reason cannot be the spread of services in many countries because it may just exploit the available labor force.
Assertion: Multinational companies help in the growth of local compani...
Multinational companies (MNCs) play a significant role in the growth of local companies in various ways. The given assertion states that MNCs help in the growth of local companies, and the reason provided is that the activities of MNCs, such as research, manufacturing, and customer care services, are spread over many countries. Let's analyze this assertion and reason in detail.
1. Expansion of Market Opportunities:
MNCs have a vast global presence and access to international markets. When they establish operations in a particular country, it provides local companies an opportunity to tap into these markets. This expansion of market opportunities enables local companies to grow by reaching a wider customer base.
2. Access to Technology and Knowledge:
MNCs often possess advanced technology, research capabilities, and industry expertise. Through collaborations, joint ventures, or technology transfer agreements, local companies can gain access to these resources. This access to technology and knowledge can significantly enhance the capabilities of local companies, enabling them to develop innovative products and improve their production processes.
3. Supply Chain Integration:
MNCs often integrate local suppliers into their global supply chains. This integration allows local companies to become part of a larger network, which can lead to increased business opportunities and growth. MNCs typically have stringent quality standards, and working with them can help local companies improve their product quality and meet international standards.
4. Job Creation and Skill Development:
When MNCs establish operations in a country, they create job opportunities for the local workforce. This job creation not only reduces unemployment but also contributes to skill development. Local employees working in MNCs can acquire new skills, knowledge, and experience, which they can later utilize in local companies or entrepreneurial ventures.
5. Competition and Market Dynamics:
The presence of MNCs in a market often leads to increased competition. This competition can drive local companies to become more efficient, innovative, and customer-oriented. As local companies strive to compete with MNCs, they are compelled to improve their products, services, and overall business practices, leading to their growth and development.
In conclusion, MNCs indeed help in the growth of local companies. They provide market opportunities, access to technology, integration into global supply chains, job creation, and foster competition. While the reason provided in the assertion is correct, it is not a complete explanation. The growth of local companies through MNCs is a result of various factors and not solely limited to the spread of activities across countries. Therefore, option 'C' is the correct answer.