Multi National Companies (MNCs), Working and Various Advantages & Disadvantages

In simple and easy terms we may define MNCs as the Multi National Companies are the oversees corporations working in more than one countries other names of Multi National Companies are Trans National Corporations (TNCs) , Multi National enterprises (MNEs) etc. There are numerous advantages and disadvantages of multinational companies (MNCs). In this article we will try to discuss these different advantages and disadvantages in detail.

Let us first of all discuss various advantages of multinational companies. The first major advantage of a multinational company is that it enhances the level of investment, level of employment as well as the level of income in the country in which MNC operates. Likewise another advantage of multinational companies (MNCs) is that the industries working in local country may acquire the latest and modern tools and equipments with the help of multinational companies (MNCs). Similarly the business of different intermediaries like distributors, transporters, retailers etc. Also flourishes due to the operations of multinational companies (MNCs).

Similarly another advantage of multinational companies is that the research and development (R&D) department of MNC are also advantageous and beneficial to local industries as well. Similarly another advantage of MNC is that the local or host country may enhance its exports and diminish its imports due to the production of MNCs resulting in a favorable payment balance.

Likewise there are also various benefits of multinational companies to parent or home country as well for instance the main advantage is that its products are marketed throughout the world via different multinational companies. Similarly MNC opens the door of employment for own citizens in the other countries as well. Similarly another advantage is that it flourishes the industrial activities of parent country in foreign countries as well.

Now let us have a look over different disadvantages of multinational companies. MNCs often outdated technology with a country in which they are working. Similarly MNCs may have disastrous consequences over the industry of the host country as they may not be able to compete with MNCs due to lack of funds and limited market. Likewise if MNC is following the geocentric policy in that case it may not provide employment opportunities in the host country. MNC also has some negative consequences for the parent country as it transfers  the capital to other country causing deficiency of foreign reserves. These were few major advantages and disadvantages of MNCs