Delta is a local example of an MNC. Image credit Nehandaradio.com
ZIMSEC O Level Commerce Notes: Business Organisations: Advantages and Disadvantages Multinational Companies
Advantages
- Pays taxes to increase revenue for the host government.
- Creates employment to local people.
- Brings the latest technology to the host country.
- Brings foreign currency to the host country.
- Bring skills and machinery to the host country.
- Improves the Balance of Payment for the host country.
- Improves the GDP and standards of living in the host country.
- Enjoys economies of scale.
- Gets access to cheap labour.
- Circumvets barriers to trade.
Disadvantages.
- Exploitation of labour.
- Social cost and environmental degradation.
- Companies remit back their profits to parent companies thus reducing the benefits of increased
- standard of living.
- Political interference in some countries.
- Brings in unfair competition onto local infant industries.
- Increased risk of loss of company due to political instability
- Complex legal requirements from country to country.
- Complex macroeconomic environments
To access more topics go to the Commerce Notes page.
