Economics


Chapter : 4. Globalisation and the Indian Economy

Disadvantages Of Multinational Corporations

Disadvantages Of Multinational Corporations
1. Harmful for host country :
The main objective of the MNCs is to earn maximum profit. They over exploit the natural resources of the host country.
2. Harmful for the local producers :
Most of the local producers have failed to compete with the MNCs so, either they hve sold their units to MNCs or have been wiped off.
3. Harmful for Economic Equality :
(1) MNCs are interested in setting up industries in particular region and hence those regions develop very rapidly and other regions remain under developed.
(2) As MNC's pay more salaries & perks, it creates gap between the local employers & those of MNC's.
4. Harmful for freedom :
(i) The corporation make all efforts to bring to power in the host country a political party that is favourably inclined to them.
(ii) As MNC's pay more salaries & wages it creates is a gap between the workers of local employers and those of MNC's.

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