Advantages and disadvantages of multinational companies

In order to know what are the advantages and disadvantages of multinational companies that exist, you must first know that multinational corporations are companies that have operations in more than one country.

In general, they are large companies that establish branches in other countries to gain more market, either when they have sold out in the local market or to take advantage of the potential of emerging markets with less competition or none.

The increase in quality standards

The multinational corporations raise competition in foreign markets where venture. That is why on many occasions it brings great benefits.

This happens because they are producers of goods and services that adhere to the best possible standards because of the increase in quality standards, which are established in function of the production being increasingly optimal.

And above all, that their products are increasingly competitive within the range of the same items, but above all that, they can reach competitive prices for all types of consumers.

Since consumers are willing to spend their money on the best products, local businesses are forced to improve the quality of their products.

This competition, to produce good quality ends up benefiting consumers who receive a good value for their money, being satisfied by the acquisition of the best goods and services in the market, and at a better price.

These multinational companies have a great challenge in their hands and must satisfy the market, no matter how demanding it may be.

Creation of jobs

Multinational companies play an important role in creating jobs in foreign countries where they venture, due to their massive operations, they employ many local people in the countries where they work.

They also employ some to work at their headquarters, giving foreigners the opportunity to gain experience in their international career.

On the other hand, these companies, if you will, come to fulfil a function not only of employers but of academic training.

This is especially important in developing countries, where unemployment is high and thanks to the installation of multinationals many people from the surrounding area benefit from learning new trades and acquiring new experiences.

Still today, we do not understand how they will consider an invasion to those who come from other countries with capital, experience and capacity to teach us to live better.

In any case, the countries where these companies have settled, what they have brought is progress and benefit for the country that receives them.

Destruction of local industries

Multinationals usually have more money in terms of capitalization than local companies, this means they are able to finance operations for a long time.

It even does it, without making a profit knowing that, once they have developed brand loyalty, they will start to obtain sustainable benefits from that moment.

It is perhaps for this reason that local producers feel displaced and lose the spirit of competitiveness by moving aside. Therefore, we must study very well what are the effects of globalization on multinational and national companies.

This means that they can deliberately set very low prices in order to have a market share of the companies they have found in that market.

Therefore, this may lead to local businesses closing since they can not afford to charge the same low prices.

In that particular, we could say that there is no lack of reason for the suspicion of opening the doors to foreign companies, but if we consider that the beneficiaries are the people of the same country, we should evaluate between two alternatives.

This diatribe, or disjunctive, would benefit the consumer with prejudice to the national producer versus profit to the producer, retiring or not, giving better prices to the consumer.

No way and looking at yourself with the glass you see, it is possible to think that when there is foreign investment, the country where these companies are installed may be damaged.

Capital flight

On the contrary, if we start by evaluating the increase of jobs with salaries according to the situation of the country, plus all the benefits of the law, then we should not look bad at foreign investment.

Several countries have different laws on the movement of money of foreign companies operating in their jurisdiction. But some countries have set certain limits on the amount of money that can be repatriated from commercial income.

Regardless of the different money laws, which has been made for the benefit of multinationals, the money ends up being repatriated to the country where they have their headquarters. This translates into a capital flight, which harms the economy of the host country in the long term.

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