Pros and Cons of Multinational Corporations


There is a love-hate relationship with multinational corporations. We praise them for creating jobs but also loathe them for their “hire-and-fire” policies. We are grateful to them for providing consumers with a lot of choice but also hate them for pushing traditional food out of the way. We are also thankful for the many brand-name products that are appearing in stores but we also despise them for the many environmental and health issues they present.

But all that said, multinational corporations have provided much benefit for the countries they operate in. Or do they? Here’s a look at the pros and cons of multinational corporations.

List of Pros of Multinational Corporations

1. They create jobs.
We are indeed thankful to multinational companies for creating jobs, especially in areas where there are little to no job opportunities. The arrival of foreign money into developing nations has definitely helped boost development as well.

2. They help keep costs down.
Some may consider this a con because we have heard of multinational companies making use of child labor to lower down costs. It is also true that many companies prefer to outsource work to countries where wage is low and production quality is good. But for some consumers, having access to quality products that cost less is such a benefit given this period of soaring prices.

3. They have standards to uphold.
Multinational companies have expanded all over the globe. Whether you’re in Asia or in Europe, you’re likely to find a branch (or more) of McDonald’s. And while the menu may differ from country to country (owing to local offerings), it is still McDonald’s.

List of Cons of Multinational Corporations

1. They are known for exploitation.
As mentioned earlier, multinationals can offer products at really low prices. But the story behind how it is made possible is just sad: some big-name companies ignore rules and regulations. As used in an example earlier, some of those that do work for large companies are children.

2. They earn loads of profits but don’t share the wealth.
Mass producing items and selling them at a low price does earn you a lot of money. But sometimes, multinational companies just think of reaping the rewards without thinking about the people who worked behind the scenes to make such a feat possible.

Yes, they may have employed cheap labor in developing countries but it would also be fair to increase wages when they have earned so much in just a year. This is an issue multinational companies often forget.

3. They make business hard for everyone.
Small businesses and startups can have a hard time dealing with a multinational corporation. As such, they either shut down early or never even get set up at all. This kind of monopoly is not good for the economy because there is no competition. As a result, economic growth is stunted and that’s bad for whatever country they operate in.

While some small businesses and startups have survived the challenge of multinational companies, some either get absorbed or shit down entirely.