Benefits Of Multinational Corporations Essay
Benefits Of Multinational Corporations
Like any other multinational corporation, Acme Motors have been coupled with various economic implications and benefits to the foreign countries in which it operates. Acme is a motor vehicle company headquartered in Nuevo Laredo but performing other international business in Mexico, Spain and other countries. In the foreign countries, it has been involved in the manufacturing of motor vehicle engines above their assembly to complete vehicles. The performance of the company is usually fed by a number of comparative advantages which are implied by its operational capacity.
Generally, the large scale capacity of the company has been a major advantage which the company uses to create economics of scale in its operational system through its broad endowed portfolio of technology. It has been able to successfully compete in the foreign international market which is highly competitive. The company has various artistic and management tools that help to impair the effects of foreign business culture which may lead to operational failures.
It has a wide management support which compound the tools of research into the broad market and political risks operating in the foreign market which may bring operational losses. Either it has also used the tools of mergers and acquisitions to help prevent the negative impacts of foreign market infestations. (Skene, 1992) However, the operational portfolio of the company has been faced by the challenges of negative externalities of environmental pollution and degradation in the host countries.
Basically, the industrial nature of the company compounds various environmental degrading facets which include resource over exploitation emission to the air pollution, water pollution and the general socio-economic implications which are of negative external capacity. However, the problem of environmental pollution and degradation to the company allies to been a fatal problem which has even called for various statutory control programs both by the company and the state government. Usually the tool of increasing taxation has been a subjective implication which has helped the company to change its industrial characteristics.
Through higher cost levies by such foreign governments, the company has changed its industrial technology to more environmental friendly methods which cause less pollution. Generally, through such taxes, the government has then compensated the society for such environmental pollutions above supplying various public goods which benefit the people. (Wray, 1997) To the company, the tools for control of environmental degradation have posited various cost implications both in the short run and in the long run.
Since the system for implementing environmental control has been achieved through change in modifying operation to capture more friendly methods, this has however been costly. Higher cost has had a negative implication to increases in the cost in the short run. However, increases in cost have been ransomed through the use of proper management tools which ensure a well balanced business management conceptions which continue to provide the company competitively advantages in the market.
However, the long run cost has been reduced through higher sells achievements from the active product support from the environmental friendly consumers. (Snowdon, Vane, 1997) Generally, as an important tool, the environmental aspect is an important tool which the company and any other should apply in the international portfolio. The cost of environmental degradation is costly and would perhaps outweigh the benefit cost relationship which provides grounds for competitive advantage at the market.
Either, it is important in safeguarding the broad interest of the society with which the manufacturing (industrial) activity is allied to. Reference Skene, G, (1992) Cycles of inflation and Deflation: Money, Debt at the 1920’s. Westport CT: Praeger. Snowdon, B & Vane, H, (1997) A Macroeconomic Reader. London; Rout ledge. Underwood D, (2004) Principle of Macroeconomics; Toward a Multiparadigmatic approach. Journal Economic issues, Vol. 38. Wray, L (1997) Kenneth Bouding’s Reconstruction of Macroeconomics. Review of social economy, Vol. 55.