Multinational Corporation Disadvantages

The multinational corporations The multinational corporation is a worldwide corporation that has many operations in more than one country other than its home one, where it’s headquartered or managed. These companies’ main objectives are to increase market share and reduce cost of production in order to maintain more profit. The multinational corporation has the ability to affect the host countries in their economic and political situation positively and negatively. The main advantages of the multinational companies in the host countries are that they increase the investments in these countries. Because of their need to a large number of work forces, Multinational corporations are a dynamic force

(Gorden,2013) The multinational companies also may affect the local industry since their products competes the local producers and they are putting lower prices for their products, so this will lead the local companies to close and break down from here the government in the host countries must put laws and regulations to protect these companies and protect the local industry. The loss of job at the home countries is a major problem that these countries face since these multinational corporations are benefiting from cheaper labor from outside the home countries and letting them work which will lead to more unemployment in the local work market. The multinational corporation also may play a big role in the host countries politics since these corporations pay a lot of money to support the candidates that apply their policies and achieve their economical and political objectives, and this is one of the major problems that the host countries face and that let these countries depend on the home countries policies and rules to regulate their own laws (Gordon,

When these treaties are repeated many times and between different countries, they change into customs that other countries may refer to in similar cases in their relation with the corporations. This custom swill is an effective way to fairly control the relation between host and home countries in a way that every country has its rights conserved. As a conclusion of the above discussion, the most proper way to manage the multinational corporations is the international laws. These laws and treaties conserve the rights of all the sides. But the international laws do not take the place of ethics that must be found in the business. A mix between ethics and international laws in a balanced way that all the sides are satisfied and this will prevent any conflicts that may arise due to these operations.

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