MULTINATIONAL COMPANIES AND ITS AFTERMATH

Multinational Companies and Its Aftermath

Multinational companies and its aftermath

Introduction

The multinational companies also referred as international companies, they have powerful influence on small local companies because there are some multinational corporations handling a huge business and thus the budget of those companies has exceed the GDP of some nations. The multinational companies play a wide role in the development of the country's economy, Multinational Corporation (MNC) are huge organizations with a vast network of branches and subsidiaries, multinational corporation' s worldwide activities are controlled by their parent companies, and multinational companies are the large size corporations.

The international labor organization has developed a “work agenda” which contains a lot of those challenges organizations have to face at the beginning the investment done by multinational corporations usually encourage domestic investment. The companies are situated all over the world and the company is gaining competitive advantage. A multinational company brings many benefits to the developing countries. Multinational companies increase the wealth of local people. (Varian & Hal, 2005, Pp. 42-48)

MNC's affects on globalization

Globalization refers to increase trade, investment increasing the connectivity with the world's markets or with the cross international borders. The multinational companies' plays a vital role in globalization changes, and globally there is an expansion of multinational companies, as they are becoming the biggest player in the world trade. The globalization is searching for cheap labors and seeking to maximize profits, globalization enhances competiveness both at the level of the firm as well as on the level of the nation. Their market size power may act as a barrier to new competitors, because they have monopoly in the market, and eventually strengthening and contributing towards the attainment of market monopoly. (Marc, 2006, pp. 102-104)

Multinational companies also effects on the mutual negotiation process of the country. Where at one side it is bridging the gap between the countries but along with that they are also influencing international governance and acts as representative. E.g. Human resources working in multinational companies are getting influenced because of restrictions of operations and thus they are getting affected. Multinational companies have their own norms and values what they have to follow throughout their global reach, and sometimes it's becoming difficult for the people working with that environment according to their culture and traditions (Doremus, 2005. 150). These companies are also affecting the less developed countries. For instance the growth in the less developed or developing countries are concentrated more on investing in different industries , but multinational companies are therefore hindering for them to invest in such areas and providing them to face difficult situations by lacking reliable forms of industries. Also the multinational companies are following the state of art technologies and therefore affecting the local labor by labor saving technologies. (Kanter, Rosabeth, 2005, pp. 402-414)

Discussion

Multinational Corporations came into existence since the twentieth century, they are the big companies who are taking over the business of local companies, and thus it is also creating a problem of unemployment ...