Pros and cons of transnational corporations

positive and negative aspects of multinational companies

Transnational corporations can benefit from favorable taxation policies. Corporations benefit from different regulatory regimes. Even though multinational companies have an international presence, their efforts work toward a continuous improvement in the quality of their goods or service purchased by local consumers.

The Bangladesh garment industry is a prime example of this advantage. When that power is ethically and morally wielded, then societies benefit from what can be accomplished. ABInBev produce and distribute over different types of bear around the world.

There might still be local competition, but the average consumer will work with the cheapest offer whenever if provides a similar amount of value for them. ABInBev might offer different beer choices to the consumer, but you are still sending your money to that one company when you purchase an item.

advantages and disadvantages of multinational corporations essay

They ensure minimum standards. If that power is used for profit over anything else, then households are harmed by their activities.

Importance of multinational corporations

Exploit natural resources: Transnational corporations can switch their operations to a country with a lot of natural resources to reduce their operation cost as well as benefit from cheap labor. Being able to offer low prices comes at a high cost. Another good example is oil exploration, which is both costly and risky. Multinational companies offer these economies more variety in product and price choice, which creates another layer of diversity for the local consumer. There are multiple types of multinational corporations that exist. They do not have a centralized management system. Poor services: TNCs offers poor services to the workforce. Transnational corporations create opportunities to improve the quality of products or services offered at the local level. Most countries treat the assets of a multinational corporation as an independent structure, like a transnational company, instead of looking at the hierarchy of the business for what it tends to be. The latter allows each market to operate independently from every other one — making it more like a DBA rather than a true satellite from the central office. The advantages and disadvantages of operating under this structure involve the money and power that these organizations control. This practice intensifies the phenomenon of wealth consolidation. However, if the economy is dominated by a very small number of enormous corporations, it becomes more vulnerable to damage by the failure of any one of them.

Giant multinationals use the scale of developing economies to push the local firms out of their business. Multinational companies work from centralized structures.

Pros and cons of transnational corporations

It is a way to help communities save some money on the things they need while providing another layer of financial support. This advantage is helping some developing countries to triple their GDP over the past 10 years.

Walmart would be ranked 26th, just behind Thailand according to the latest data produced.

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Advantages and disadvantages of transnational corporations