Allowing or prohibit multi-national corporations.

Allowing or prohibit multi-national corporations.

Name: Jose Carlos Cano Arroyo cod: 200054569.  level 7.

The multinational corporation is a business organization whose activities are located in

more than two countries and is the organizational form that defines foreign direct

investment(2001,p.2). The history of the multinational corporation is tied closely to the

origins of trade in and between cultural communities, and these communities remain

important in many sectors in the modern economy. Nowadays, countries seriously

discussed before accepting a multinational for the consequences that these could bring.

Therefore will treat to compare the risks of allowing multi-national corporations to extract

resources vs. The risks to the economy if multi-national corporations are banned.

Allow multinationals in a country it implies that it could serve the valuable function of

importing new practices(1992,8). They provide new technologies that have considerable

impact on national growth indices. Also the multinational corporation employs large

numbers of employees that it increases the quality of life of many families. However its

practices are likely to conflict with existing institutions and cultural norms. In addition

some knowledge are embedded in organizations and cannot be transferred. Therefore,

accept multinational affect national growth.

 Governments that prohibit foreign companies seek to maintain political and economic

autonomy. The state is obligated to create laws that promote and support the development

of local companies. It ensures that profits remain in the country and these are invested in

the same . The absence of multinationals there will not be unequal competition between

local companies that also many people would be encouraged to create new businesses.

 Though although local companies are constrained by the lack of new technologies and

progress of the country would be slower. Therefore, the final is the national growth.

Allowing or prohibit multi-national corporations both options are used by many countries

because both impact the national growth. Since multinational corporations are often large,

they pose unusual challenges to national and regional governments who seek to maintain

political autonomy and yet are often anxious to seek the investment, technology, and

managerial skills of foreign firms. The best option will be fit with the policies and

conditions of the country. Therefore must be chosen that will help the growth of the country

and welfare of citizens.

Reference:

Multinational Corporations (2001), International Encyclopedia of the Social & Behavioral Sciences, ISBN: 0-08-043076-7, url: https://www0.gsb.columbia.edu/faculty/bkogut/files/Chapter_in_smelser-Baltes_2001.pdf

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