1.6 Multinational Companies (MNCs)

Multinational Corporation (MNC)

A company that operates in two or more countries. It is generally a very large company, but it does not have to be. MNCs are also sometimes referred to as a multinational enterprises (MNEs).

Advantages of MNCs to a country

• Economic Growth

• New Ideas

• Skills Transfer

• Greater choice of products

• Short-term infrastructure projects

Disadvantages of MNCS to a country

• Profits are repatriated

• Loss of cultural Identity

• Brain Drain

• Loss of national market share

• Short-term planning

Reasons for the Growth of Multinational Companies

• Improved Communication

• Dismantling of trade barriers

• Deregulation of the world’s financial markets

• Increasing economic and political power of the multinational companies