Benefits that MNCs bring to overseas countries HARRIET BENNETT
- Created by: Harriet
- Created on: 30-03-15 14:43
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- Employment
- Benefits that MNCs bring to overseas countries
- Wages
- Cheaper labour is important but some MNCs pay higher than average wages in host country.
- They pay higher than average wages to increase motivation, increase productivity, lower staff turnover and wider choice of workers
- Skills & technology transfer
- MNCs may require skilled workers & train up local workers.
- They may acquire useful skills that will benefit them if they change jobs.
- Locals trained as managers may learn new business techniques.
- MNCs bring new technologies which can be learnt & adopted in the host country
- New work practices help the host country to become more competitive and grow (Technology transfer)
- Effects on the wider economy
- Increased employment & wages should enlarge the tax base & increase government revenue.
- If benefits were paid to the unemployed, this bill may decrease.
- Profits of the MNC can be taxed,
- Increased government expenditure can benefit the wider population & the economy
- Exports may increase, improving the balance of payments.
- Corporate social responsibility
- All companies will claim to have CSR policies.
- This may be centred on the workforce, the local community or the local environment.
- It may include better pay and conditions, improvementsto infrastructure, use of sustainable resources & environment protection
- Those companies that take CSR seriously can greatly benefit the communities they operate in.
- Wages
- Initial investment in host country creates employment.
- Workforce needed.
- Local businesses may be involved in supplying or servicing the MNC & see an increase in business, taking on more workers.
- The local people who have found employment will spend their income with local businesses. Increasing demand and creating more jobs
- There is a positive local multiplier effect
- Benefits that MNCs bring to overseas countries
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