Disadvantages Of Multinational Corporations

1164 Words5 Pages

Multinational corporations can be defined as enterprises operating in several countries but are managed from their home country. Generally, any company that acquires a quarter of its revenue from operations outside of its home country is considered to be a multinational corporation. Today the multinational corporations have a radical effect on the economic system all over the world. This is due to the growth of international business of the multinationals, which has tremendous effect on the traditional forms of international trade and capital flows for economies at large. In the world economy they create a powerful force. The multinational corporations have shown enormous power in the areas of international trade and finance. These businesses accounted for only one-eighth of all international trade in early 1970 's. Its easy to see how they have much they bounded since. Characteristics of a multinational company include:
They are massive in size and turnover super normal profits.
Due to takeovers and mergers, a multinational corporation has assumed lots of power. Also with this, its size makes it oligopolistic.
A multinational corporation facilitates multilateral transfer of resources allowing it to trade resources between 3 or more countries.
The institution may even hold the key to control, it 's interests and areas of operations can envelop many other countries.

There are four types of multinational corporations:
A multinational,

Open Document