The Importance of MNC’S to the World Essay
The Importance of MNC’S to the World
Multinational corporations are companies with their home base in one country and operations in many other nations. Most of these, very immense firms, establish in third world countries or developing countries where they manufacture the same identical product for very low costs compared to the ones in developed countries.
One of the purposes of MNC’s is to create an economic development which is described as sustained growth in income per capita over a period of time, which usually involves a structural and institutional change in an economy. In addition, MNC’s goals are the reduction of relative and absolute poverty, the increase of employment and the improvement of social welfare. Therefore, it leads to a higher standard of life to all.
Determining the positions (in favor or against) of nation-states towards MNC’s is a bit complicated and not always logical. Generally speaking, developed countries usually favor MNC’s as they allow firms to make more profit with cheaper labor. With developing countries the stance is not usually very clear, they will favor this in order to boost the economy and infrastructure. Thus, delegates must consider many complex economic factors that would help explain whether it is in their favor to support or oppose multinational corporations or not. Also delegates have to take into account whether that particular developing nation has comparative advantage or not.
There are many different issues connected to corporations. In fact, we need to look at what is occurring with them and see if these corporations are causing more problems or are helping to solve problems of the world. Multinational Corporations can manipulate governments and in absence of global governance increasingly gain the control of the world economy. They seem to be profit-motivated and are engaging in destructive competition and insidious plots to economically and politically manipulate entire economies.
To conclude, MNC’s are necessary to have a world order. An order in which the search of benefits covers not only the company but the society in which it has been established.
In this sense, MNC’s are a good influence to a country, but governments are supposed to be the control agents to make its presence significative, beneficent and useful.