Multi National Corporations; Are They a Boone or Bane to Third World Countries
Multi-National Corporations: Are they a boon or bane to Third World Countries
Oyewole Ayotunde
ENG4U
Ms Wilhelmina Amansec
18 May 2016
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Multi-National Corporations:
Are they a boon or bane to Third World Countries
Multi-national corporations are fast-growing in the economy of today, most people believe it is not right for MNCs to take advantage of developing countries and that they should be expected to and should abide by the laws of human rights, other believes that they should take advantage of the opportunity and do what they believe is best. But developing countries (Third world) should be against multinational Corporations because these corporations can negatively affect the socio economic structures of the host nation or country.
Most third world countries (developing countries) are former colonies, having gained independence, many of these countries, especially smaller ones were faced with the challenges of nation and institution building on their own for the first time, In the 1980s, economist Peter Bauer offered a competiting definition for the term “third world” he claimed that the attachment of third world status to a particular country was not based on any stable economic or political criteria and was a mostly arbitrary process. ("Third World"), third niworld countries are groups of developing nations, that do not align themselves with policies of either the US or the former Soviet union, they are the less economically advanced countries of Asia, Africa or Latin America. ("The Definition Of Third World").
Multi-National Corporation (MNCs)
It is a corporation that has its facilities and other assets in at least one country than its home country. such companies have offices in different countries and usually have a centralized head office where they co-ordinate global management . ("Multinational Corporation (MNC) Definition | Investopedia").
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Multi-national operations sometimes involves itself in the production of essentially the same product. According to reports major assets of MNCs are owned by citizens of the company’s home countries.(Satnalika). Majority of board of directors are citizens of the home countries.
Multi-national corporations engage in very useful and morally defensible activities in third world countries, for which they receive very little credit. Significant among these activities are their extension of opportunities for earning higher incomes as well as the consumption of improved quality goods and services to people in poorer regions of the world, instead these firms are negatively viewed by Marxists and dependency theory advocates because most of the these firms originated from industrialized countries like US and UK are viewed as predator(bane) rather than allies(boon)in economic development.(Ahiakpor).for instance, the Improper use in the third world baby milk formula manufactured by Nestle, the gas leak from Union Carbide plant in Bhopal India, and the involvement of foreign firms in the overthrow of President Allende of Chile have been used to perpetuate the ugly images of MNCs (Ahiakpor).
In economic terms, a firm’s advantages in establishing a multinational corporation include both vertical and horizontal economies of scale (i.e., reductions in cost that result from an expanded level of output and a consolidation of management) and an increased market share. Although cultural barriers can create unpredictable obstacles as companies establish offices and production plants around the world, a firm’s technical expertise, experienced personnel, and proven strategies usually can be transferred from country to country. Critics of the multinational corporation usually view it as an economic and, often, political means of