Definition:
A corporation that has its facilities and other assets in at least one country other than its home country. Such companies have offices and/or factories in different countries and usually have a centralized head office where they co-ordinate global management. Very large multinationals have budgets that exceed those of many small countries.
Read more: http://www.investopedia.com/terms/m/multinationalcorporation.asp#ixzz2HrlExkqc
In a simpler version, that it has a lot of small companies in other countries other that its own country.
Examples of great Multinational companies in the world are:
- Microsoft
- McDonald's
These companies are one of the famous companies in the world. They are very well known.
- Improvements in technologies
- technologies such as transports and communications
- able to reach consumers all around the world
- example: Online shopping
- Governments
- Governments encourages relationships between countries for international trading
- Limited resources
- such as coals and petroleum
- causes companies to set up factories near locations that provides these raw materials.
- Living standards
- people now days are willing to buy anything they want instead what they actually need.
- impacts on host country
- advantages
- increase in the number of employments
- inward flow of capital investments
- technology skills are brought to the country
- disadvantages
- affect local businesses from host country
- outflows of money
- impacts on home country
- advantages
- inflow of foreign funds
- increase in foreign employments, cheap salaries
- new production and management skills provided by the foreign countries
- disadvantages
- decrease in employments for the people living in the home country
- outflow of capital investments
- produce cheap products in host country
- impacts on the society
- advantages
- labor markets brings competition towards the markets
- child labor increases family incomes
- able to obtain new resources
- spreads culture/ traditions to consumers from all over the world
- disadvantages
- pollution and environmental effects
- Cutting down trees in order to create buildings
- increase in competition may lead to being it as a threat
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