Chapter 20.3, Problem 2R

To determine

To evaluate: The pros and cons of multinational corporations.

Explanation of Solution

Effects of multinationals
Pros	Cons
These organizations' operating size and complexity will give them the chance to take advantage of the economies of scale, which opens the way for lower production costs and prices for buyers. This is especially essential for businesses that bear exceptionally high fixed costs, such as manufacturers and airlines.	These businesses are not well-known for fair treatment of employees and are notorious for breaching laws and regulations, and also going to turn a blind eye to workplace discrimination. They are put in the news for exporting and skimping on efficiency to the lowest bidders.
Multinational firms are able to bring advanced technologies to developing nations, while at the same time introducing low-cost goods to the wealthy ones.	They take advantage of consumer expense. Corporations are generally involved in the expense of customers, but multinationals, with more control, are bringing this to a new level.
By using labor in areas of the world where the low cost of living for manufacturing does not involve high wages, these corporations can hold down consumer prices. As a result, a lot of businesses will profit too.	These corporations will gain enormous profits and don't share their money. For example, some businesses that have production plants in China, where salaries are very low, do not raise wages for employees because they actually have large amounts of extra income.
The inward investment of these multinational corporations provides the much-needed foreign currency for developing economies, which in turn helps to build employment and increase hopes about things that are likely to occur.	Multinational companies typically lead to emissions in the interest of profit and make use of non - renewable energy which may pose a danger to the environment. They also misuse the atmosphere and generally do not take great care when using their resources.

Economics Concept Introduction

Introduction: A multinational corporation (MNC) has infrastructure and other resources in one other nation than its place of origin. Usually, a multinational company has offices or warehouses in various countries, and a centralized corporate headquarters where global management is coordinated.