By utilizing labor in parts of the world where the low cost of living does not require high wages for production, these companies can keep consumer costs down. Deprived of a job meaning lacking of income, if the society is jobless eventually affects the healthy economy due to insufficient money to spend. Last but not the least, the staff from those companies are of different nationalities and culture, they can share different thinking make the company growing up better. List of Pros of Multinational Corporations 1. Workers in their Foxconn plant in China had to work under such grim circumstances, including 15-hour shifts, pressure to meet unrealistic quotas and low wages, that several of them committed suicide by leaping off the factory roof. The company starts a multiplier effect like dominoes, one thing effects another.
Words: 2611 - Pages: 11. They bring with them both advantages and disadvantages for the country that plays host to them. The companies that have the financial resources to expand operations to different countries often establish plants, factories and corporate headquarters. List of Cons of Multinational Corporations 1. Remember that the market dominance of multinational corporations would make it hard for smaller local companies to thrive and succeed. Therefore there are advantages and disadvantages of unemployment in a country.
Any profits are taxed at the owners individual federal tax rate so that person does not have to file a separate business tax. If an organization manufactures products that would be impractical to produce in the United States, then they can do so in other locations where compliance costs are lower. In addition, brand value is increased because people can find the same brand, the same products from the same quality. It is a structure which may limit consumer choices. Due to the fact the strategy involves an organization operating internationally through co-operation and interdependence of its various offices, it has the centralization benefits associated with international strategies, whilst having the local responsiveness characteristics of a domestic strategy … type. For example: A company that manufactures things in multiple countries is able to capitalize on the cheaper sources of materials, labor, distribution, etc and in turn sell a cheaper product at a higher profit ma … rgin.
The 5 Cons of Multinational Corporations This time, take a look at the disadvantages linked to multinational corporations: 1. For full information please refer to our terms and conditions and disclaimer. Need help writing essays like this? Many businesses can create a surplus inventory of goods and services. There is no limit to the life of a corporation, since ownership of it can pass through many generations of investors. In it, some disturbing parallels are drawn between the behaviour of corporate entities and the behaviour of psycopathic individuals. Cultural imperialism or Coca-cola-ization of society. List of the Advantages of Transnational Corporations 1.
They have been accused of trying to cut corners with both safety and pollution in order to keep costs down. Some companies contribute a little more, while others designate a little less. British American Tobacco British American Tobacco is one of the largest tobacco suppliers in the world. This is because it becomes an encumbrance. About the Author Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology.
Their large profits are consumed for development and research. Secondly, multinational corporations play a big role in creating employment in the foreign countries. They have 3 main factors: Motive, Means and Mobility. Multinational corporations provide the different developing countries all over the world with the much needed financial infrastructure to achieve social and economic development. Benefits to Countries - Increase in tax revenues - Increase in employment - Attract people with higher paying wages Disadvantages of Multinational Corporations 1. The same thing goes for the drug manufacturers. But together with the benefits that they offer come ethical conduct which happens to exploit the neediness of these developing nations.
Since consumers are willing to pass their money on merely the best merchandises. That is because for most corporations of this structure, the standard cost of living requirements are much lower elsewhere. A transnational corporation owns facilities or assets in a minimum of one additional country other than its home nation. This characteristic protects the stockholders of the corporation because the only financial loss that they may suffer is limited to the amount invested. .
Multinational corporations have both advantages and disadvantages since it creates jobs but can also end up in the exploitation of workers, among other things. These transnational corporation advantages and disadvantages show us that the pricing structures we enjoy when shopping are often due to this structure. This is one of the best qualities of these corporations. Even though these companies offer regional variations of their products or services, sometimes even under different brand names, there is still confidence in the quality of what you receive. In recent years, this practice has come under fire in many countries.
Sole Proprietorships The first and most simple form of a business is a sole proprietorship. The company could then shift their expenses back to the United States. His path to success was not easy. While this strategy is controversial, it is also legal if it has been set up properly and can lead to significant tax savings. They allow for a wider market. The same goes for automobile manufacturers and other large corporate entities.
These processes are respectively called autologous and monologous transfusions. List of Advantages of Multinational Corporations 1. Words: 864 - Pages: 4. Transnational corporations may also present social and economic problems. While it is true that multinational companies bring a lot of job opportunities, there is also no denying that they are the cause of some major issues in the economy.