It means the Government is saving money from importing seed for every cropping season of the year and it uses the saved the money to finance some of the valuable social services for the people. Countries must be mentioned on lists from at least five countries to be considered a best multinational company. These divided opinions made up the two major conflicting schools of thought. During times of either political upheavals these multinational firms do take part in supporting the current Government just to protect their businesses interest and survival. Increased Employment : Most developing countries are labour surplus countries, due to population explosion. When these Multinational Corporation leaves the country the structures are either sold or surrendered to the Government for other developmental use in the case of multipurpose buildings.
Stage two is a natural progression. The effects of globalization on multinational businesses can be good or bad, depending on the nature of the corporation in question. The operational size and scale of these corporations can give them the chance of taking advantage of the economies of scale, which paves the way for lower average costs and prices for consumers. Without their global presence and large profit margins, they will not be able to do this. That can threaten the sovereignty of the host capital-importing country in dealing with a firm that is larger and more powerful than the government. Matsushita, for example, adopted a global strategy that focused its resources on serving a world market for home entertainment products.
Stage Three—Multinational In time, the stage-two company discovers that differences in markets around the world demand an adaptation of its marketing mix in order to succeed. They might unfavorably dominate the market. The company have a staff strength of over 15,000 workers and a large number of casual workers. There are subtle but real differences between these three labels, as well as multinational corporation and worldwide enterprise. Multinational firms may help improve infrastructure development in the economy. Political Instability: Because these corporations require a stable host government, which of course is sympathetic to capitalism, they try as much as possible to cause directly protect the existing government whenever a reactionary leader or group seems to take over the government. A multinational firm may set up its business operation in collaboration with foreign local firms to obtain raw materials not available in the home country.
Nestle is an example of a transnational corporation that executes business and operational decisions in and outside of its. The inflows of capital help to finance a current account deficit. Multinational corporations by producing certain required goods in Malawi for instance Portland cement company do bring some of the ingredients from abroad that are used for making cement thereby helping in reducing its dependence on import. This enables them to carry on production most effectively and efficiently. This company does not adapt for the sake of adaptation. This is naturally a tremendous advantage to businesses, who stand to increase their potential customer base by millions by reaching out to foreign buyers. The Multinational corporations have in the case of Malawi helped in the integration of both national and international markets.
They manage production establishments or deliver services in at least two countries. But though they bring about several benefits to such nations, they also come with ethical conducts that happen to exploit the neediness of these countries. In stage-three companies, each foreign subsidiary is managed as if it were an independent city-state. They keep on adding to their economic power through constant mergers and acquisitions of companies, in host countries. The multinational corporation may also eventually begin exporting products made in the host country.
How many people acquire the technological skills which its claims to transfer to Nigerians. It is also through the employment provision that malnutrition levels get reduced at the house hold in such a way that through little income people get from working in the Multinational corporations ,Malawians are able to balance the nutritional levels of need at household level. Setting up of Subsidiaries: The second mode for investment abroad by a multinational firm is to set up a wholly owned subsidiary to operate in the foreign country. This level of investment is important for determining the level of economic growth. Head Office The central organization of the firm as posed to the foreign subsidiaries. Multinational corporations are those large firms which are incorporated in one country but which own, control or manage production and distribution facilities in several countries.
The shift is toward the global or transnational corporation, which views the whole world as one market. They make people forget about their own cultural heritage. Their prime objective is global profit maximisation and their actions are aimed at achieving that objective, not developing the host less developed country. They are arbitrarily fixed by the companies so that they have to pay less taxes in India. Increased Productivity Multinational corporations promote productivity and efficiency in the host country. This improves the balance of payments.
Since source of bulk of foreign capital and investment are Multinational Corporation, they have been allowed to operate in the Indian economy subject to some regulations. It was headquartered in London, and took part in international trade and exploration, with trading posts in India. In recent years, Japanese automobile company Suzuki made a large investment in Maruti Udyog with a joint collaboration with Government of India. H 2: The benefits and minimal of negative and anti-development objectives will not help to develop Nigeria economy. Brought to you by Minimize Costs Through Partnership Formation Companies affected by globalization are able to form partnerships with organizations all around the world. In West Africa, international cocoa producers have adopted programs to guard against child labor and ensure that children have access to education. Conclusion While it is a fact that multinational corporations bring a lot of benefits, we cannot also deny that they can cause of some major issues in the economy.
They can create jobs and wealth. Multinational: A multinational organization is one that allocates resources without regard to national frontiers. This is a very sensitive barrier for Nigeria. This research will expose to the policy markers and economic planners both of private and public sector 5. The following are the important reasons for this change in policy towards multinational companies in the post-reform period.
As a result of democracy Malawi experienced quite a good number of foreign investors that has opened their subsidiaries in the country. The only Harley investment outside the home country is in marketing. Some negative outcomes generated by multinational corporations include increased , , and. While the Euro-American nations described multinationals as the engine of growth in the underdeveloped countries. List of Disadvantages of Multinational Corporations 1. One the other hand, multinationals often simply buy out local competitors or keep local competition from developing. They manufacture Guinness Stout, Harp Beer, Guinness Malta, and the rest of others.