Multinational Companies - For/Against

Little revision sheet with arguments for & against multinational companies. Includes some examples and evaluation points.

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  • Created by: Joana
  • Created on: 29-03-10 14:41
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Arguments For Arguments Against
Create wealth & jobs around the world by Often exploit workers by using "slave labour"
investing in economies, therefore where employees are paid less than
promoting economics acceptable wages at the Western standard,
growth/development. Those who receive particularly in developing countries meaning
an income are more likely to purchase little tax is paid.
goods and services within their economy, E.G. Nike employing children as young as
thus boosting local economies. 10 in Cambodia and Pakistan to make
soccer balls.
E.G. Car manufacturing industries Evaluation Point: Some may argue that a
within the UK, Swindon, Derby. wage is better than no wage at all.
Contribute to pollution & threaten the
environment.
Economies of scale lowers price for
Evaluation Point: MNCs polluting may be
consumers due to low costs. down to government failure in correcting
this small firms can also pollute.
It is likely that MNCs will be subject to
the tax regime within the host country
and therefore contribute to that country's
tax revenue.
Evaluation Point: MNCs often choose Often have monopoly power and therefore
developing countries as their host make excess profits.
countries where governments can be
corrupt which means tax revenue
may not filter through to the
government itself.
MNC dominate markets driving smaller firms
Large profits can be used to finance
out of business, reducing diversity within a
Research & Development. market.
Ensures a "minimum standard" around
the world. People can travel and use the
same firm, e.g. McDonalds knowing what
to expect from that firm's good or service.

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Are Multinational Corporations a Good Thing?
Multinational Companies are agents of globalisation. They seek to produce outside of
their home country, in order to maximise profits by making use of cheap labour. Firms
move into less developed countries to exploit the opportunity to pay ridiculously cheap
wages to those in poverty desperate for a source of income.…read more

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