effects of MNCS Flashcards
Multinational cooperation definition
business that operrates in several counteries
adv of MNCS on local econimies
creates job, increasses employment of local labour
e.g builing new factory in host country
imporvaemnt in employemnt meanas imporvemnt of local living standards
especially in LEDS
employees of the business get better pay and better working conditions than staff of local firms
dis of MNCs on local economies
might take advanatge of LEDS and could employ children or explot workers by making them work long hours in difficult conditions
could increase health problems , putting strain on local healthcare providers
dis of MNCS to their host nation
if MNC has a barnch or department in a country then it will have to pay taxes to the national government, such as on exports and land they buy
postive effects on national economy of a MNC
can create large FDI flows-money flowing in and out of an economy
therfore, impprving counteries balance of payments as creates FDI inflows into the economy
need to train its staff with new skills or introduce new technoloy to make and sell its producrs
if staff leave, they can then transfer this knowledge of skills to another firm
therefore, imporving skills and etchnology of nation as a whole
increasing effiecincy and producitvity of nation, helping economic growth
negative effects on national economy of a MNC
may force dometic firms out of business by undercutting their prices or offering a better service to consumers
short term good for consumers
long term could reduce choice for consumers
what are ethics
rules and principles that state which behaviours are accpetbale in society
Mncs locating to LEDS
may relocate to Leds can have lower labour costs and might spend less on things such as safety equpment as do not have strict rules in their country
good for MNCS as can save them money
bad for LEDs AS means low working conditions and pay
