7 Multinational Corporations Pros and Cons

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Not all countries have the same financial infrastructure in place. There are a number of developing countries that are still in the infancy stage that rely on multinational corporations heavily. A multinational corporation has the ability to offer developing countries the financial infrastructure that is required to grow the country in a variety of ways. Through the infrastructure provided by this type of corporations, it is possible for these countries to develop socially and economically. Even though there are a number of benefits provided by multinational corporations, there are also relevant downsides that need to be understood. The topic of multinational corporations is something that does spur on debate.

Before you come to your own conclusion of these type of corporations and their need in society, it is important that you understand this issue from both sides. The social and economic growth that is offered by multinational corporations does result in power and some ethical issues. This means that the need for these type of corporations is questioned by some. The only way to decide if multinational corporations are the best choice is to break down both the pros and cons of this issue. This will enable you to see both sides.

List of Pros Associated With Multinational Corporations

1. Size Provide Benefits to Customer
It is important to note that one of the biggest advantages to the existence of multinational corporations is the actual size of these corporations and the benefits that are provided to customers as a result. This means that corporations that are larger in size have the ability to keep costs lower and pass on these savings to consumers. The largest corporations are those that keep costs low. This is most seen in industries where costs can rise like in the automobile and airline industries. Multinational corporations are ideal, because they help to ensure that costs do not rise above a certain point and allow consumers to benefit from this economic scale that is set. Customers that want prices to stay within a certain range should be thankful for multinational corporations and the stability that they provide.

2. Creation of Jobs
Another way that you can look at the advantages associated with multinational corporations is to see the jobs and wealth that is created as a result. These large companies have businesses all over the world that are essential to the economic standing of small developing countries. There are countless jobs that are created as a result of the existing multinational corporations That are in place. It is crucial that jobs exist in developing countries in order for them to grow and for people to come out of poverty.

3. Standards
It should also be noted that multinational corporations also set a standard that customers can rely on. This means that people are more likely to be a customer at a multinational corporation because the service or product that is provided is sure to meet a minimum standard of quality. This means that you know what you get when you go to this type of corporation and this is what people can rely on all over the world. Many people are looking to buy services or products that have a minimum standard that they can depend on.

4. Risk
In certain industries where risk is the highest, it is critical that multinational corporations are in place. This is required so that the cost and risk is managed. An example of this is in the oil industry where risk is high, but profitability can also be astronomical. Research is done by these large corporations and is relied on.

List of Cons Associated With Multinational Corporations

1. Dominance
The biggest issue that most people have with the existence of multinational corporations is their domination of the market. These type of corporations have a stranglehold on the market that is unprecedented. This means that small or local businesses that are looking to launch and grow do not really have a chance to have much success within these markets, because they do not have the ability to compete with multinational corporations on any level. This dominance in the market is true of all industries.

2. Monopoly
It is also important to note that multinational corporations also have the power of monopoly on their side and this often comes at the expense of the shopper. This means that customers are not the main interest of the multinational corporation, but profit is. Obtaining this high profit will most likely come at the expense of the customer.

3. Slave Labor
The labor standards that are set by these large corporations are also questioned. Slave labor is used by some of these corporations and is looked down upon.