Steven and ihram's multinational business

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Steven and ihram's multinational business

  1. 1. Multinational Business<br />By Steven & Ihram<br />
  2. 2. A multinational organization has operations in more than one nation. <br />Its management headquarters are in one country, known as the home country, and the organisation operates in several other countries, known as host countries.<br />What is a Multinational?<br />
  3. 3. Transfer of technology, capital and entrepreneurship. <br />They increase the investment level and thus the income and employment in the host country. <br />Greater availability of products for local consumers. <br />Greater access to high quality managerial talent which tends to be scarce in host countries. <br />Increase in exports and decrease in imports, thereby improving the balance of payment of host countries. <br />Help in equalizing of cost of factors of production around the world. <br />They provide an efficient means of integrating economics.<br />Costs and benefits to host country:<br />
  4. 4. Acquisition of raw material from abroad, which is cheaper in cost. <br />Technology and management expertise acquired from competing in global markets. <br />Export of components and finished goods for assembly or distribution in foreign markets. <br />Inflow of income from overseas profits, royalties and management contracts. <br />Jobs and career opportunities at home and abroad in connection with overseas opportunities.<br />Helps modernise less developed countries<br />Costs & benefits to home country:<br />
  5. 5. Multinational businesses brings opportunities to those living in the host country.<br />They gain more in wages than what the average wage in the country. Despite this being considerably lower than the US wage.<br />This will allow them to have a better standard of living.<br />MNEs may provide training and education for employees thus creating a higher skilled labour force. These skills may be transferred to other areas of the host country.<br />Benefits to the workforce:<br />
  6. 6. Utilizing factors of production from a number of countries.<br />Cost advantage from cheap labour costs.<br />Cheap raw material from different parts of the world.<br />Influence on Government policies.<br />Plays a key role in globalization<br />Advantages of being a multinational<br />
  7. 7. Examples of Multinational Organisation<br />

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