Disadvantages of MNC's for the host country. MNC's may kill the domestic industry by monpolising the host country's market. 1. 7. 1. First, it is less costly in both moving expenses and training to hire a local person. Multinational corporations can provide developing countries with many benefits. Advantage: Enhanced Investment in Host Country Multinational corporations can be an invaluable dynamic force for employment as well as the wider distribution of capital and technology. Every company in the Fortune Global 500 Top 10 earned more than $240 billion in revenues during 2017. Transnationalism: The term ‘transnationalism’ indicates specific strategies of MNC/TNC to control production facilities in more than one country … They're often criticized for exploiting their host countries for their resources and using foreign cities to skirt stricter labor and wage laws at home. List of Advantages of Foreign Direct Investment. Brings foreign currency to the host country. Brings the latest technology to the host country. Economic Threat: The MNCs realising the host country’s dependency on their investments may exert their force to make the country to accept their terms and conditions. The advantages and disadvantages of multinational corporations are essential to review because of the monetary power these companies wield. However, these institutions may also bring with them relaxed codes of ethical conduct that serve to exploit the neediness of developing nations, rather than to provide the critical support necessary for countrywide economic and social development. 3. MNC's and their effect on both domestic and host countries A corporation that has its facilities and other assets in at least one country other than its home country. Political interests of MNCs may mirror the political interest of their respective home nations, and this may be detrimental to the host … Impact of multinational companies on the host country AO3. Pays taxes to increase revenue for the host government. MNC's may transfer technology which has become outdated in the home country. Improves the Balance of Payment for the host country. FDI: direct investment by a company in production located in another country either by buying a company in the Advantages. Multinational companies are headquartered in home country and they operate business from host countries. Foreign direct investment can stimulate the target country’s economic development, creating a more conducive environment for you as the investor and benefits for the local industry. This results in the depletion of non-renewable scarce resources in the host country. The advantage, as shown in Table 14.4 “Advantages and Disadvantages of the Three Staffing Strategies”, of hiring a host-country national can be an important consideration when designing the staffing strategy. Bring skills and machinery to the host country. 4. Advantages from the Viewpoint of the Home Country: Some of the advantages of the MNCs from the viewpoint of the home country are: (i) MNCs usually get raw-materials and labour supplies from host countries at lower prices; specially when host countries are backward or developing economies. disadvantages of mncs to the host country Loss of national sovereignty, as the host nation cannot control what an MNC does in other nations, which may be inimical to its interest. One good way to do this is evaluating its advantages and disadvantages. Advantages of Multinational companies on Host country: Multinational companies are companies who have huge business operations and they operate in more than one country. As MNC's do not operate within the national autonomy, they may pose a threat to the economic and political sovereignty of host countries. 2. TNCs bring in capital for the development of these countries. Creates employment to local people. 13. 2. 12. The Main Advantages and Disadvantages of Transnational Corporations (TNCs) Operations for the Host Country and the Investing Country: Advantages to Host Country: Foreign Capital: Developing countries suffer from shortage of capital required for rapid industrialization. MNCs may repatriate their profits to their own country of origin, and thereby, deprive the host countries from the benefit of new investment. Economic Development Stimulation. Evasion of Taxes: The MNCs may manipulate their accounts to evade local taxes.