Advantages and disadvantages of Multinational Corporation for host countries

Advantages of Multinational Corporations

The Multinational Companies are best in carrying out their operations in more than one country at a time and this is the reason as to why they are called Multinational Corporations (Mathews, John, 15). To the host countries, the Multinational Corporations produce a number of products, which provides the best possible standards as required by most of the customers. This is one of the reasons as to why the Multinational Corporations are highly required to keep the best standards possible as required; since, this will be a good way of winning their customers and ensuring that they retain their new customers in their host country. The Multinational Corporations such as Samsung have another major advantage that they cause to the host country and it’s the creation of employment that they provide to many youths who are jobless in the host country (Mathews and John A, 15). Employment is well created by the many branches that the corporation has as they are in need of labor to work for them accordingly. Samsung being a Multinational Corporation is best in provision of new skills, new ideas and techniques that lead to improved efficiency with all productivity levels in the host country rising to better. Samsung does all this; since, their workers have got enough experiences from the former country, where the MNCs was functional before. The economy of the host country will highly be improved by the Samsung Multinational Corporations as they try to do their best in making sure that they don’t fail and in turn results to improved economy due to the presence of many industries as well. More opportunities for the industry are created and this is because of the high need of materials by the corporation in the host country. Capital inflows are what Samsung Multinational Corporations contribute to the host country and this is to the advantage of the country; since, many projects are established in the country, thus increasing the returns of the country and at the same increasing the industries in the country as well (Wood, 15). The flowing of cash through Samsung Multinational Corporations to the host countries can be used in paying off debts of the country and reduce all the debts that the host country was owed by other nations. The establishment of the Samsung Multinational Corporation in the host country results in improved technology that is brought by people who come from different nationalities and who had different technologies being used in their country. These people have all these different technologies with them and through the Multinational Corporations they introduce them to the host country thus improving its activities and knowledge sharing. The sharing of the new technologies equips the manpower of the host country with the required modern technologies and skills required in ensuring that profits are highly improved for the whole corporation. The Multinational Corporation is advantageous as they best in the possessing of global marketing network and this is good as they can use this platform in the promotion of the all the exports of the host country.

Disadvantages of Samsung Multinational Corporation in host countries

The Multinational Corporations if not well looked upon them can lead to destroying of the local competition in the host country due to lower prices’ that they bring over local firms in the country. Samsung Multinational Corporations tend to have a high effect on the country’s economy and this makes them to take advantage of the political system of the country to hide their responsibilities (Cavusgil and Erin Cavusgil, 15). The multinationals do this through pressuring the political system to extend their even bribes them by paying them off to protect the company’s operations from being terminated. Transfer pricing is a method that many of these Samsung Multinational Corporations are done with the aim of avoiding the paying of taxes. The Multinational Corporations cause a high reduction in the foreign reserves for host countries and this is the reason and this is as a result of the fact that they take their profits out of the host countries where they have been operational in terms of dollars (Bose and Tarun Kanti, 15). Samsung Multinational Corporations highly affects the foreign policies of the host countries by increasing the dependence of the host county and this happens to their parent counties; hence resulting in this type of effect that even reduce their good relationship. Samsung Multinational Corporation’s brings other disadvantages to the host countries, which are evident through the provision of the costly services thus only affordable by a few customers. The costly services are provided to the consumers when provided to the government, they are a bit cheaper and they tend to be exploited a lot. Another disadvantage of Samsung Multinational Corporations in the host country is that they are not liable to paying of taxes in the country, thus the host countries are disadvantaged as they do not gain from the corporations through taxing them as required (Asakawa, Kazuhiro, and Westney, 15). The Multinational Corporations have disadvantages that are evident through the clashing of objectives that result from different expectations of the Corporations and those of the host country. Inappropriate technology to local conditions is another disadvantage that is caused by Samsung Multinational Corporations as it’s required to be content with all that is required by the host country and not bring its unrequited technological rules to the country. Accentuating of all the regional disparity together with the Draining of Foreign Exchange are some of the disadvantages that come as a result of the introduction of the Multinational Corporation in the host country.

Works Cited

Asakawa, Kazuhiro, and D. E. Westney. “Evolutionary Perspectives on the Internationalization of R&D in Japanese Multinational Corporations.” Asian Business & Management 12.1 (2013): 115-41. ProQuest. Web. 8 June 2015.

Bose, Tarun Kanti. “Advantages and Disadvantages of FDI in China and India.” International Business Research 5.5 (2012): 164-74. ProQuest. Web. 8 June 2015.

Cavusgil, S. T., and Erin Cavusgil. “Reflections on International Marketing: Destructive Regeneration and Multinational Firms.” Academy of Marketing Science. Journal 40.2 (2012): 202-17. ProQuest. Web. 8 June 2015.

Mathews, John. “China, India and Brazil: Tiger Technologies, Dragon Multinationals and the Building of National Systems of Economic Learning.” Asian Business & Management 8.1 (2009): 5-32. ProQuest. Web. 8 June 2015.

Mathews, John A. “Dragon Multinationals: New Players in 21st Century Globalization.” Asia Pacific Journal of Management 23.1 (2006): 5-5+. ProQuest. Web. 8 June 2015.

Wood, Van R., Dennis A. Pitta, and Frank J. Franzak. “Successful Marketing by Multinational Firms to the Bottom of the Pyramid: Connecting Share of Heart, Global “Umbrella Brands”, and Responsible Marketing.” The Journal of Consumer Marketing 25.7 (2008): 419-29. ProQuest. Web. 8 June 2015.

 

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