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Pros And Cons Of Mncs

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A Multinational Corporation (MNC) is an organization which has operations in multiple countries around the world, but managed from its home country (Business Directory, 2011). Richard Caves defined MNCs as “…firms which control and organize production using plants from at least two countries” (Caves, 1996). There are many advantages brought by MNCs to their host countries. These positive contributions include increase in investments, upgrading infrastructure, creating jobs and opportunities for locals, increasing GDP and economic growth. There are sometimes disadvantages to host countries, however. Sometimes the MNC doesn’t help in the economic development of its host country and local economies may get defeated by it. It is argued that MNCs may encourage or create anticompetitive practices in the host country’s markets and manipulate the entirety of its economy. This is because profit-maximization is the main goal which drives MNCs, and its economies-of-scale might be too powerful for local firms to compete with. …show more content…

These include: • Many small business enterprises were closing down. • Import numbers were rising disproportionately to export numbers. • Rate of unemployment among locals was

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