Multinationals Advantages and Disadvantages

Multinational business relies on its imports and exports around the world. Factories may be set up in different areas of the world and have their business based on the import and export of raw materials, which is what is done by most of them.

Developing countries can gain more from multinationals since they help increase labor and its opportunities, which then means that the average income of a person will increase allowing them to spend more and lead a better life-style, which helps the tax bases to increase due to people wanting to spend more, often on things they could not afford earlier, and if the tax base increase, the government will be able to supply more for their people and give better health support, better education and help the country to develop more.

This could also help in stabilizing the economic system, and increasing the GDP and GNP. International firms that are implanted in developing countries will also help in educating part of the population by teaching the employees the skills required for the job, making it a greater number of educated people. However, multinationals do not always have a good impact on the global business environment, especially in developed countries, as outsourcing to developing countries is happening which causes for jobs to be lost in developed countries and thus, making the average income lower.

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Also, small businesses do not benefit from this as they are dominated by the multinationals and their brand names. Their impact on our environment is not good, as they produce a lot of waste products, which are not always recycled or used properly, especially in smaller, less developed countries as the laws and restrictions are not always applied.

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