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Discuss the impact of MNCs (Multi-National Companies) relocation on the host country.

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Introduction

Discuss the impact of MNC´s (Multi-National Companies) relocation to the host country. A Multi-National Company (MNC) is a business which trades in one or more countries. MNC´s are major contributors to accelerating the globalization process creating increased global interdependence. Generally, MNC´s outsource or offshore their production, or portions of their production process to emerging economies (e.g India) in search of lower production costs, grants, relaxed laws and legislation etc.. and this brings with it both positive and negative impacts for both the source and host country. By outsourcing production, MNC´s create massive employment in the host country, making disposable incomes of those employed rise, contributing to a general rise in well-being. ...read more.

Middle

Local business will hence benefit too from any improvements in infrastructure financed by these MNC´s, as the costs for transporting goods will fall, and the time required also, allowing local firms to adopt strategies such as JIT( Just-in-time) that will overall make them more efficient and profitable. However MNC´s tend to commit unethical practices such as exploitation. This implies little health and safety regulations at their production plants, which often leads to illnesses and injuries for the workers (e.g abusive working routine lead to suicides in Ipad´s factory (China), hence implying sanitation costs for the government. ...read more.

Conclusion

MNC´s are also major exporters of the ´Western Culture` which brings with it capitalism and materialism that may impose themselves and erode local cultures and values of the places these companies outsource to, making the country suffer a degradation of it´s identity Overall, MNC´s are proved to be essential for a emerging country to grow as they provide vital employment and finance that creates a multiplier effect, allowing for many people to break-out of poverty and national business to grow and expand in a profitable manner, and despite they exploit the nation´s workers and resources, it is a necessary step in the cycle of any economy to boost out into a developed country. ...read more.

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