While multinational companies can take advantage of cheap labor , they might also be subject to higher taxes and have to pay more for other things such as transporting goods. Many countries impose taxes called duties or tariffs on imports and exports, making it more costly to sell goods to consumers in other countries.
What is the disadvantage of multinational company?
Economic exploitation
Multinational companies are guided by profit motive. They can make economic exploitation of host countries by excessive use of natural resources and raw materials. They can pay low wages to local people. They can charge high price for products to exploit consumers .
What are the advantages of a multinational company?
- creating jobs. ...
- bringing expertise in and improving the skills of the workforce. ...
- benefiting from economies of scale . ...
- gainingtechnical economies with automated equipment. ...
- achievingpurchasing economies .
What are three advantages of multinational companies?
- Better emplyment opportunities.
- Development of new technologies.
- Improvement in infrastructure.
- Availability of variety of goods.
What are two advantages of multinational companies?
- Specialisation in production. The scale of many industries means firms split production into different countries. ...
- Outsourcing. ...
- Economies of scale. ...
- Tax avoidance.
- Employment of skilled labour.
- Wider consumer base.
- Evaluation.
What are 2 cons about a multinational company?
- They can limit consumer options. ...
- They can exploit local workers because of local conditions. ...
- They can bankrupt local businesses. ...
- They look for monopoly opportunities. ...
- They might remove jobs from local economies. ...
- They enter a community at a high cost.
What are the features of multinational companies?
- (i) Huge Assets and Turnover: ...
- (ii) International Operations Through a Network of Branches: ...
- (iii) Unity of Control: ...
- (iv) Mighty Economic Power: ...
- (v) Advanced and Sophisticated Technology: ...
- (vi) Professional Management: ...
- (vii)Aggressive Advertising and Marketing:
Why multinational companies are bad?
In developing economies, big multinationals can use their economies of scale to push local firms out of business. In the pursuit of profit, multinational companies often contribute to pollution and use of non-renewable resources which is putting the environment under threat.
What are the impact of multinational companies?
Provision of significant employment and training to the labour force in the host country . Transfer of skills and expertise , helping to develop the quality of the host labour force. MNCs add to the host country GDP through their spending, for example with local suppliers and through capital investment.
What are the three advantages of Globalisation?
- Access to New Cultures.
- The Spread of Technology and Innovation.
- Lower Costs for Products.
- Higher Standards of Living Across the Globe.
- Access to New Markets.
- Access to New Talent.
- International Recruiting.
- Managing Employee Immigration.
What are the advantages and disadvantages of Globalisation?
- Transfer of Technology.
- Better Services.
- Standardization of Living.
- Development of Infrastructure.
- Foreign Exchange Reserves.
- Economic Growth.
- Affordable Products.
- Contribution to World GDP Growth Rate.
What are the 2 strategies commonly used by multinational companies?
Insourcing and purchasing foreign competition are two strategies commonly used by multinational companies of all types.
What are the role of multinational corporation in developing countries?
MNCs are believed to be highly beneficial for developing countries in terms of bringing employment opportunities and new technologies that spillover to domestic firms . Furthermore, MNCs often benefit from government subsidies, which could in future be linked to investment in local firms.
What are the types of multinational companies?
Multinational corporations can be categorized into four different types: decentralized multinational corporations, centralised global corporations, international companies, and transnational enterprises .
What are the examples of multinational companies?
- Microsoft. Microsoft Corporation is an American multinational technology company. ...
- IBM. ...
- Nestle. ...
- Procter & Gamble. ...
- Coca-Cola. ...
- PepsiCo. ...
- Citigroup. ...
- Sony.
Is Coca-Cola a multinational company?
Coca-cola is a multinational company the produces and distributes beverage products around the world. They have factories in over 200 countries and employs approximately 92,400 employees globally.
