MAKE A BLOG ABOUT THE WAYS YOU THINK TO LESSEN, IF NOT ELIMINATE THE NEGATIVE CONSEQUENCES OF MULTINATIONAL CORPORATIONS

   Multinational corporations or known as transactional corporation is creating a different impacts on countries and their government. However what impacts does it bring? There are positive and negative effects of Multinational Corporations.

  This blog will discuss the positive and the negative consequences of multinational corporations and what are the ways in order to lessen these negatives if not eliminate. Let’s first define what is multinational corporations.

  Multinational corporations or MNCs, are businesses that have operations in countries other than their home country. These buildings are referred to as “plants,” and they serve as factories and small stores where products are manufactured and frequently sold. Profits earned in these nations are repatriated to the corporations’/companies’ home country or headquarters.

   Some of the examples of MNCs are Microsoft, Apple, Shell, Coca – Cola, Adidas, MCDONALD’S and etc.

 Now, let’s discuss what are the effects of multinational corporations on the different countries and host governments. Let’s start with the positive effects of multinational corporations.

Positive effect of globalization from global corporation

• Better allocation of resources

• Lower prices for products

• More employment worldwide

• Higher product output

Now, let’s discuss the negative consequences of multinational corporations and the ways to lessen these if not eliminate.

Negative Effects of Multinational Corporations

• Sweat - shop labor – one of the negative and disadvantages of MNCs is their exploitative move against their workers. The labor of the workers become mechanical by doing their jobs over and over again which makes them able to produce more goods to sell and paid low wage income despite their work hours contribution. The production of goods in greater quantities is beneficial to the MNC as your profit will also increase.

Like for example in the contractor making clothes for sportswear giant Nike has been caught using forced labor in Malaysia. It was discovered factory workers being paid a pittance and forced to live in squalor while Nike stars earned a fortunes. The Nike boosts to the world, but it has two side of the story. The public face and the hidden misery.

• Local Companies Being Affected – local Companies might be gravely affected by the presence of an MNC in the country because they don’t have the access to the same level of economies of scale as those that the MNC has access to. Thus, the MNC might drive the local business to fail.

• MNC involvement frequently leads to a lack of indigenous R & D, the transfer of technology to host countries that they do not require, the adoption of capital-intensive technology that eliminates jobs, and a rise in psychological dependence on MNCs.

• MNCs produce non-essentials for the host country and usually just set up a portion of a productive process, leaving little enhance opportunity for linkages to be formed in the host countries and only limited increase in employment.

• MNCs finance their subsidiaries with scarce local capital rather than bringing needed capital into the host country, causing a drain on the host country’s resources.

• The type of machinery needed in MNC might be too capital intensive and expensive which negatively affects the host countries. This is one of the reasons why developing countries or host countries remain stagnant or are encountering difficulties in their economic growth because the machinery needed by the MNCs are embedded with a high price as they come from other known companies as well.

Ways to lessen the negative consequences of multinational corporations.

• Public disclosure of complete corporate tax returns, to allow citizens to be informed on their profit ratios, tax rates, deductions, and other tactics

• No exceptions or excuses for violations of existing environmental and pollution regulations.

• People should not active with global corporations, and should appreciate local brands.

• Providing jobs from our local and lowering the products cost for the local consumers to buy.

• The lower the price the greater possibility that more consumers will buy a certain products, which is taxed by our government. And the tax that will be received helps our economy in its developments.

• Limiting the dependency on MNCS

Hope this blogs gives you insight and understand more the positive and negative consequences of Multinational Corporations as well as the ways on how to lessen the negative consequences of these. Thanks for reading.