Question: Explain why a multinational company´s decision to locate in a country might be both good and bad for the government.
(Maximum of 200 words).
Make sure you have answered the question.
Answers due in for Tuesday the 22nd of January.
Good luck.
Mr Wickham
Why a multinational company´s decision to locate in a country might be both good and bad for the government?
ReplyDeleteFirstly, if the multinational locates its company there, that means that the government will be able to have a larger amount of markets available. Therefore more income and tax for the government. Also there are multinationals such as McDonald’s that are such economy of scale, that it is bigger than the country´s economy. As well, multinationals can improve and develop products by having the money to fund research and development. This may include certain machines and advances which could be very expensive and unaffordable for the government, but give technological advantage to the whole country as a whole.
On the other hand, multinationals can switch profits between countries, as they switch from one country to another depending on the final costs of production. This affects the government because it wants multinationals to locate in their country because multinationals generate lots of money and later on pay them as tax. Also the multinationals force local firms out of businesses and cause unemployment to rise. As well, they exploit workers as they are too large to have a personal touch with them and this usually less protection for the workers. Sometimes multinationals except unfair or even illegal pressure on governments in some countries.
Firstly, Multinationals companies are companies that operate in more than one country . It might have its head office in one country, but it operates worldwide. Governments compete against each other to try to get multinational companies to locate a plant on their countries as they are so important they often have a larger income than a whole country. They normally compete for multinationals because they provide large amounts of jobs for that country; they bring experience, skills and even new technology with them which makes everything much more efficient and easy like machines. Multinationals often make agreements or treatments as they pay large amount of taxes which boost government´s revenue.
ReplyDeleteOn the other hand, multinationals can also have some disadvantages for governments as the workers that have a job on these multinationals often are exploited as they pay them low wages for hard work. It also force out local firms of that country and cause unemployment to increase as well as switching profits between countries so the government looses loads of tax revenue and cause unemployment to go up.
A multinational company, is a company which has physical appearance in more than one country. Eg: Wal-Mart.
ReplyDeleteThis type of company would be good for a company for many different reasons, such as, increase of employment, or technology and skills which makes the country more competitive, another important advantage that multinationals have is that they manage to boost a country´s economy revenue, just with the money they have to expend on taxes. Finally another factor that makes multinationals a ´must have´ in a country is the amount of money they bring by selling the goods and services worldwide to new markets.
However, multinational also bring quite big problems to countries, for example the relocation of factories, multinationals will move from place to place looking for the largest profits, low tax rates offered cause disemployment and decrease of income, another disadvantage if the switch of profits between countries or that local firms are forced out because they cant compete with multinational prices. Multinationals also bring exploitation of workers, where they take advantage of the poor working condition undeveloped countries have. Finally the last disadvantage multinationals have is that they interfere with government control, multinational influence governments to avoid taxes or changing laws.
A multinational is a company that operates in more than one country. Although it has its head office in one country, it will operate world wide.
ReplyDeleteGovernments all around the world compete against each other so that multinational locate in their country. A multinational company’s decision to locate in a country is good for the government because it can provide many jobs for the people. It also brings money and prestige to the country by selling the goods and services abroad to larger an new markets. Another advantage is that they pay large amounts of taxes which boots government revenues. They will also bring knowledge, skills and technology to the country, it makes it more developed and cultured.
However multinational can also have disadvantages. They may relocate the factories. So government will lose lots of tax revenue, and it will cause unemployment. Multinational can also force out local firms. Local firms can be forced out of business because the are not able to compete with the multinationals, it will cause unemployment to increase. Sometimes multinationals apply unfair or illegal pressure on governments in some countries. They can also exploit workers. By locating in less developed countries, they can cut wage costs by paying the workers less. In this countries there is less protection for workers.
A multinational is a company which is physically present in more than one country. There are a few reasons why a multinational locating in a country might be good for the government of said country.
ReplyDeleteFirstly, the multinational might open a huge factory in the area which would provide jobs for the people. Furthermore, multinationals and the people that work for the multinationals bring business knowledge, skills and technology with them that might’ve not existed in the country beforehand. Also, they may pay taxes which boost government revenue. Lastly, when multinationals sell goods overseas some money will go to the government of the country which the multinational has located in, bringing money to the country.
On the other hand, multinationals might bring problems to governments. One disadvantage is that some multinationals might be so big, bigger than the government itself, that they may interfere with government control in the country. Also, some multinationals may exploit workers and take advantage of them. Thirdly, multinationals may force competing firms of the country out of business, making the government lose money. Finally, multinationals may move their factories to wherever it is profitable to produce, meaning the government will lose money, and multinationals may switch their profits between countries, avoiding paying taxes to the host country and giving the money to another country.
Multinational corporations are business entities that operate in more than one country. The typical multinational corporation normally functions with a headquarters that is based in one country, while other facilities are based in locations in other countries. As everything multinationals have its benefits and its inconveniences. On one hand multinationals benefit the country in which its is located as its gives jobs to the habitants and so give wealth to the country, in addition their size and scale of operation enables them to benefit from economies of scale enabling lower average costs and prices for consumers and so making the habitants happy. Finally the success of multinationals is often because consumers like to buy goods and services where they can rely on minimum standards and this makes habitants feel secure as they now what to expect. But on the other hand multinationals have its bad side as their main interest is to win money and so they sometimes can escape the taxes as the government will let them as they bring wealth to the country, also multinational companies often contribute to pollution and use of non renewable resources which will damage the country in which they reside. Finally but not less important multinationals have been criticized for using “slave labour” (workers who are paid a pittance by Western standards).
ReplyDeleteA multinational is a company that operates in more than one country. It might have it head office in one country, but it might have its head office in one country but it operates worldwide.
ReplyDeleteGovernments often compete for multinationals to locate in their country for the following reasons, they can provide large amounts of jobs so there is an increase on employment, it brings knowledge, skills and technology with them so it makes them stronger and much more competitive, Another reason is that they pay large amounts of taxes which boost government revenues and finally all this brings money to the country by selling the goods, so we can say that in a way it makes them richer.
On the other hand, multinationals have negative effects such as the relocation of factories, they might have to move to another country if they don’t get that much profit. Also the workers, are many times exploited they locate it in a less developed countries where wages are cheaper. And they can pay them less for doing the same amount of work.. Another reason is that sometimes multinationals can force local firms out of business and actually cause unemployment to increase. Also switching profits between in order to pay lower taxes or avoid them in countries with poor legal systems.
Paula Garcia 10N
Explain why a multinational company´s decision to locate in a country might be both good and bad for the government.
ReplyDeleteA Multinational is a firm that operates in more than one country but will usually have its headquarters based in its country of origin. A well-known Multinational is Apple.
Governments often compete to attract Multinationals to their countries. Multinationals often provide large numbers of jobs for the people living in the area. To add to this, the business brings knowledge, skills and technologies which can help the firm expand raising the amount of revenue occasionally raising more money than entire countries. Finally, like all firms, these large scale companies need to pay taxes on their profits which help boost the countries government revenues.
However, multinationals also cause problems in host countries. Multinationals often have a bad effect on local companies which are often put out of business as they are unable to compete with these economies of scale. They may exploit workers by paying them below average wages. Moreover, these companies switch their profit to other countries to avoid paying tax locally on their profits, this results in less revenue for the government. Finally, Governments may provide grants & subventions to these companies which are often not available to national companies.
If a multinational wants to locate in a country the government of that country will like it because they will provide jobs as they will need someone to work in their factories. Another of the most benefits the relocation has is the amount of money the multinational will pay as taxes even if they are low it will still be a lot of money that the government wants to be able to develop. After the monetary and working benefits the multinationals also bring skills and new technologies and they will open their product to a wider, larger market.
ReplyDeleteAll of these have been good parts of the multinational but it has a downside all of the things it brought, except the skills, they will take if they find more favorable conditions in another country, because of this the countries will always try to maintain the multinational in their country by any means which includes giving then lower taxes. Many times the multinationals because of the low taxes and the relocation menace they will be more powerful than the governments itself and it will usually interfere with the government’s control. Another reason is that multinationals will often exploit the workers in the counties were thy have a larger presence than the government to produce more, and will try to use their influence to maintain the government away.
By Javier Silva
Here are your comments
ReplyDeleteCristina: B
Excellent answer. You covered all the main points well and some good discussion. No definition at the beginning.
Diego: A Excellent answer. All points well covered.
Marta: B
An excellent answer. careful with your definition of multinationals (`physical appearance´ is a strange definition). Produces and sells goods in more than one country (for example)
Sonia: A
Excellent answer. You covered all the main points well and some good discussion.
Patricia: B
An excellent answer. careful with your definition of multinationals. Produces and sells goods in more than one country (for example)
Pepe: C
A good answer but not well written. Be careful to organise your discussion clearly and address the question as to their relationship with governments, not what is good in general about Multinationals. `Benefits and inconveniences´? Better to say `advantages and disadvantages´ here.
Paula: A
Excellent answer. You covered all the main points well and some good discussion.
Sophie: A
Excellent answer. You covered all the main points well and some good discussion.
Javier: B
Excellent answer. You covered all the main points well and some good discussion.But no definition to start. Careful with your phrases, better to use `advantages and disadvantages´ or ´good and bad´ than the `good parts of a multinational´ which dosen`t sound right.
Maggie: C
Good answer but you didn´t analyse the relationship between governments and multinationals. Tax revenue or the fact that some multinationals are bigger than some countries and can be a bad influence on an economy, squeezing out local firms etc etc
Andrea: A
Excellent answer. You covered all the main points well and some good discussion.
A multinational company is a business organization that has its headquarters in one country, but with operating branches, factories and assembly plants in other countries. Such as ExxonMobil
ReplyDeleteThe government would benefit from locating a multinational in their country as the provide jobs, knowledge, skills and technology, this would be a great advantage towards those countries with a large unemployment or lack of knowledge. The fact that multinationals sell the goods and services abroad to larger markets can bring a lot of profits to the country. Finally the can provide lots of extra income to the government through the taxes they pay on profits.
On the other hand multinationals can have several disadvantages. Firstly to maximize their profits multinationals can move their factories to another country where they might be able to produce their goods and services cheaper. This could end with loosing lots of tax revenue and can cause unemployment. Multinationals can force out local firms creating unemployment, the sheer size of multinationals can force local firms out of business. Finally multinationals can exploit workers, this is done by multinationals locating in less developed countries where wages are cheaper, they can out wage costs by paying workers for doing the same than a worker of a developed country
A multinational is a company that exist and produce in more than one country. It has an important role in the economy, as it makes up nearly 2/3 of total world trade.
ReplyDeleteMultinationals decides in which country they want to produce, and this could bring benefit to that country's government, but it can also bring disadvantages.
Some benefits for the government when a multinational operate in their country are: it brings new technology, skills and knowledge to the country, it provides large amount of jobs, this prevents unemployment, but in my opinion, the best advantage is that it brings money to the country as the multinational can pay large amounts of taxes to the government. Sometimes the governments negotiates with multinationals so that they will locate into their country!
In the other hand, there are also disadvantages. If the company is too big, it can produce more income than the country.This brings pressure to the government. It also force out the local firms, which makes the small companies cannot pay taxes and therefore reduce government incomes.
In conclusion, I think that multinationals bring more benefit than harms.
Here are your marks Liliana and Carlos.
ReplyDeleteCarlos A
Excellent answer with clear definitions and examples.
Liliana A
Excellent answer. Good use of the information and you answered the question very well. No need for a conclusion with these shorter questions.