Explanation

A multinational corporation conducts its business in multiple countries to explore the foreign markets. A multinational corporation is not only involved in selling the goods in foreign markets, but it also conducts business in a fully integrated manner which involves procurement of raw material, converting that material into finished goods and finally distributing them to customers. The foreign branches of a multinational corporation are its subsidiaries and they all report to the holding company in their home country.
 
"Going global" generally refers to expanding the business operations in the foreign countries. There are various reasons for companies to go global.
 
The primary reason is the desire to broaden the market horizon. It helps to reach more customers and clients. Secondly, going global helps to reap the benefits of comparatively cheaper abundant resources, which are available in the form of raw materials in foreign countries. Similarly, technological advancement of the host country can be used to increase the efficiency of production.
 
Corporations also decide to go global in order to avoid the political irregularities and regulatory hurdles prevailing in the domestic economy. Moreover, globalising the business enables them to diversify.It helps to maintain optimum balance between the economic ups and downs of the domestic and the foreign country.

Verified Answer

Multinational corporations are firms which operate in an integrated fashion in two or more countries. Companies go global to diversify their business operations, to seek new raw materials along with new technology, to avoid political irregularities, to achieve production efficiency and to broaden their market share.