Advantages of Multinational Company

This resource gives information about the advantages or the merits of multinational company.

The advantages of multinational company are as follows:-
(1) Marketing Opportunity: Multinational company have big market available in different countries. They have the necessary skill and expertise to sell their products at international level. Any company can enter into a joint venture with a foreign company to sell its products in the international market.

(2) Research and Development: The resources and experience of multinational companies in the field of research enable the host country to establish efficient research and development system. This helps host country to produce quality products at least possible cost.

(3) Export Promotion: Multinational company helps developing countries in earning foreign exchanges. These companies can supply necessary raw materials, technology, technicians and foreign exchange to promote exports and reduce imports.

(4) Growth of Industry: Multinational company are specialized, fast growing and dynamic, so they offer growth opportunities for domestic industries. These companies assist local producers to enter the global markets through their well established international network of production and marketing.

(5) Give Latest Technology: Technology plays an important role in bringing down cost of production and produce quality goods on a large scale. Multinational company is technologically rich. They can be of great help to bridge the technological gap between developed and developing countries.

(6) Optimum Utilization of Resources: These companies ensures optimum utilization of natural and other resources of the home country. The home country refers to the country in which this multinational company has its head office. Thus, the growth of these companies is beneficial to home country.

(7) Help to Local Industries: Multinational companies provide a ready made market to domestic suppliers of raw material or semi-finished products. In recent years many multinational company have opened their production units in India, and most of their requirement in respect of spare parts, raw materials, etc. are being met by local suppliers.

(8) Management Opportunities: These company opens management opportunities to the management students of the host country. They can be appointed as professional managers by multinational company and can earn handsome salary and build reputation for the country.

(9 National Development: Multinational company assist developing countries to increase efficiency and productivity through transfer of technology and foreign investment. It helps developing countries by providing the required financial, technical and other resources in exchange for economic gains.

(10) Control over Monopolies: When multinational company enters in to the domestic market they compete with existing competitors and breaks the monopoly of selected few domestic companies.

In the long run the presence of multinational company along with domestic companies is beneficial to the consumers.


Author: Venkiteswaran23 Dec 2013 Member Level: Diamond   Points : 7

This article is mainly to focus on the advantages of multinational companies.Hence the disadvantages are not to be mentioned here.

Multinational companies are not a new phenomenon to our country. Even during the British rule and continuing after independence, there were a few major multinational companies. One such major multinational company was Hindustan Level. Even today the old and new generation of Indians are familiar with and remember the products of HLL which touched their lives starting from waking up till going to sleep. There were multinational companies in the field of petroleum products, food,pharma,infrastructure,even tobacco and many other sectors also.

However after independence and during or after the Janata government in the seventies, many multinational companies were nationalised or wound up to pave way for the development of our own industries.

It is again, after the 'liberalisation, globalisation' policy started in the early nineties that there started a torrent of nflow of multinational companies. They virtually occupied every sector of the economy. It is in that context the articles similar to the one above came up in promotion and support of such MNCs. They have their own quota of detrimental factors to the domestic economy, which is,however, not a subject of this article.

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