What are the advantages and disadvantages of multinational businesses?

already exists.

Would you like to merge this question into it?

already exists as an alternate of this question.

Would you like to make it the primary and merge this question into it?

exists and is an alternate of .

Multinational Business The advantages of a multinational business to host countries are:
  • Transfer of technology,capital and entrepreneurship.
  • They increase the investment level and thus the income and employment in the host country.
  • Greater availabilty of products for local consumers.
  • Greater access to high quality managerial talentwhich tens to be scarce in host countries.
  • Increase in exports and decrease in imports,thereby improving the balance of payment of host countries.
  • Help in equalizing of cost of factors of production around the world.
  • They provide an efficient means of integrating economics.

Advantages to home countries
  • Acquisition of raw material from abroad,which is cheaper in cost.
  • Technology and management expertise accquired from competing in global markets.
  • Export of components and finished goods for assembly or distribution in foreign markets.
  • Inflow of income from overseas profits,royalities and management contracts.
  • Jobs and career opportunities at home and abroad in connection with overseas opportunities.

Disadvantages include:
  • Trade restrictions imposed at the government-level
  • Taxes or tariffs imposed on imports from other countries
  • Limited quantities (quotas) of imports
  • Effective management of a globally dispersed organization
  • Slow down in the growth of employment in home countries.
  • Destroy competition and acquire monopoly.
  • Technology designed for mnc's is for world wide profit maximization not for the social welfare or development of economy.
  • They could cause fast depletion of some of the non renewable natural resources in the host country.
  • In order to alley the fears of host countries they need to:
    • provide employment
    • train managers
    • provide products and services that raise the standard of living
    • introduce and develop new technical and managerial skills
    • increase productivity

+ 82 others found this useful
Thanks for the feedback!

What was your view of pirates before you started work on "Fishing Without Nets" compared to after?

View Full Interview

What are the advantages and disadvantages of a partnership businesses?

Some advantages of a partnership business is that the gains and  losses are shared, you share the resposibilities, and it's easy to  set up. But some disadvantages to a part (MORE)

What are advantages and disadvantages of business combination?

Following are the advantages of business combination. 1. Competition between and among the companies will be eliminated. 2. Amount of capital can be increased by combining (MORE)

5 Ways to Gain Competitive Advantage in a Home Business

If you operate a small business and work from home, you'll still need to keep a competitive edge over other businesses. Competitive advantage theory in business was first prop (MORE)

How to Use Mediation to Your Advantage in Business

Mediation is a common form of dispute resolution in the United States, yet it differs from arbitration in several important ways as discussed below.Procedurally, mediation has (MORE)

How to Use Arbitration to Your Advantage in Business

Arbitration is a common form of dispute resolution in the United States and can be a cost effective alternative to litigation when used wisely. In arbitration, an arbitrator (MORE)

5 Disadvantages of Outsourcing

When your work force's skills are not sufficient to complete a project, outsourcing is an easy way to source the talent you need. Outsourcing involves hiring a freelancer or e (MORE)

Business for Sale: Choosing a Turnkey System

Getting started in the world of business is a challenge. Choosing to purchase a turnkey business can be advantageous due to its one-size-fits-all structure and its ease of sta (MORE)

The Dissolving of a Business

Have you ever heard of the saying, "All good things must come to an end?" Whenever there is a beginning, there is an end; and this is true in business as well. Businesses diss (MORE)

Advantages and disadvantages of business organizations?

Advantages of a sole proprietorship 1. Simplest and least expensive form of business to establish and to dissolve. 2. The owner is making all the decisions and controlling t (MORE)

Advantages and disadvantages of Business growth?

Advantages: Higher profit for ownersMore status , prestige and wages for managersthe business controls a larger share of the marketeconomies of scale Disadvantages: Weaker c (MORE)

What are the advantages and disadvantages of business ethics?

 There are both advantages and disadvantages to business ethics,  but mostly are advantages. The advanatages are the company will  have an increase in reputation, more emp (MORE)

Advantages and disadvantages of small businesses?

Small businesses have their advantages such as less bureaucratic  procedures, few stirrup costs, less running costs than big  companies do and they make it easy to interact (MORE)