MULTINATIONAL COMPANIES is a company that is based in one country but operates factories, sales offices in other countries.
Example: BP Company, Total companies, Shoprite Checkers, Bata Shoe Company, coca colonial company they are also public limited companies
Advantages
- They have worldwide contacts which the host country can use to boost its export sales
- They pay tax which boost the governments income
- They provide jobs (Employment) around the world
- They bring business knowledge, skills and technology with them
- They bring foreign exchange by selling their goods abroad
- They provide quality and services to private households as well as other companies
Disadvantages
- They tend to exploit undeveloped economies thorough practices such as reducing the price lower than the local traders
- They dominate most export market and forces the small local companies out of business or take over the local firms-
- They usually bring their own expert instead of training the locals too participate in important decision making
- They are able to pay high salaries and offer better conditions to attract most of the skilled locals people at the expense of the local industries
- Remittance of their profits are taken bank home, hence draining the host countries foreign exchange reserves
- They are centrally controlled and do not take into account the conditions in field in host countries when drawing up their policies.