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Geography What are MNCs? A multinational corporation (MNC) is a company that has business operations in at least one country other than its home country, which is usually the headquarters, and generates revenue beyond its borders through subsidiaries and branches. The majority of MNCs have their headquarters in developed countries. The destination of the profits transferred by the subsidiaries, decisions on investments and cost cutting, research and development, design, brand creation and advertising all remain centered in the headquarters. Some of these companies annually move capital greater than the economy of several countries put together. What their goal? The main goal of a multinational corporation is to maximize profitability by expanding market reach, reducing production costs, and optimizing resource utilization across various countries. Production decentralization: Since the 1980s, MNCs have been able to decentralize production, dividing the production chain into multiple units spread across countries. They were attracted to developing countries by several advantages: Tax reduction - or exemption - offered by local governments; Cheap work force; Softer labor and environmental legislation / enforcement; Land with low price. To take best advantage of the decentralization without having to endure the legal (and moral) limitations associated with possessing subsidiaries in countries where social protection and environmental laws are disregarded, MNCs tend to organize their production on a network of unlinked companies. Innovations in the production style: New IDL: The production decentralization generated a "new international division of labor" in which the old colonial division of labor involving Third World exports of raw materials and imports of finished goods has been transcended. According to this thesis, Third World countries have been industrialized to produce cheap labor-intensive manufacturing goods for export to the core capitalist countries in exchange for more advanced capital-intensive imports. Fragmentation of production: Fragmentation of production refers to the process where a previously integrated production process is broken down into separate stages, with different parts of the process occurring in different locations, often across international boundaries. This can be driven by factors like lower labor costs, access to specialized resources, and reduced transportation costs.