what are the advantages & disadvantages of MNCs?
|Better employment opportunities||Exploitation of cheap labour in lieu of low wages|
|Employment of new technologies||Tough competition to indigenous industries|
|Improvement in infrastructure||government diverts funds to protect MNCs for foreign investment, accumulates infrastructural facilities to them|
|Availability of goods in variety||The poor do not get the benefits from MNCs, it leads to environmental degradation, displacements issues.|
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.
- 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