Multinational companies are becoming increasingly common in developing countries. What are the advantages and disadvantages of this?
More and more transnational corporations are setting up branches and factories in less developed nations. This essay will first suggest that reduced labour costs is the primary benefit for these companies, while bad publicity because of Human Rights abuses is the main drawback.
The main reason multinationals set up shop in poorer countries is because it is much cheaper for them to get their goods manufactured there, due to comparatively lower salaries. In an ever more competitive marketplace, it is simply unsustainable for most companies to pay Western wages when they can pay someone a fraction of the cost to do the same job. For example, the only reason an iPad or iPhone can be sold for less than $499 is that a worker in China can assemble the unit for approximately one-tenth what an American would expect to be paid.
Despite this economic benefit, Apple has recently come under scrutiny because of appalling conditions in many of its Asian factories. Workers in their Foxconn plant in China had to work under such grim circumstances, including 15-hour shifts, pressure to meet unrealistic quotas and low wages, that several of them committed suicide by leaping off the factory roof. The New York Times reported that this resulted in a 12% drop in the sale of Apple products, especially after it was reported that Apple had installed nets to stop any employees killing themselves in the future.
In conclusion, huge global companies may reap the rewards of low operating costs in developing countries, but they should also keep in mind that they have a responsibility towards their workers and any infringements of their rights could negatively affect their image and stock price.
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wonderful essay. But just a doubt, reduced labour costs IS the primary
or is it Reduced labour costs ARE the primary?
“Are”
Many international companies,nowadays are migrating their plants and offices in to developing nations. This helps youngsters in poor nations to get more job opportunities. However, the incidents of exploitation on employees by these companies is a major problem. The main advantage for poor countries from these multinational companies is that youngsters in these countries would get more job opportunities. Unemployment is one of the main problems developing world faces today.Not getting an opportunity to pursue their carries make youngsters anti socials and this would increase the number of crimes in a country.However, more job opportunities by cooperate companies means more… Read more »
I wrote an essay using this question and my main Advantage is : The rate of unemployment decrease in the less developed countries (because companies need labour) and The main Disadvantage is that transnational corporations who set up their overshadow the local companies. I hope it’s fine !
Wow
Sir, the question is asking about Advantage(s) and Disadvantage(s) but you only wrote 1 advantage and 1 disadvantage. Is it okay to do that?
Yes, it’s OK.