It's about the multinational corporation

1. ASIAN UNIVERSITY OF
BANGLADESH
Presenting By
Aspia akter *** ID: 201510067
Shahara Jahan Santa *** ID: 201510016
Mahmuda Mila *** ID: 201510226
Kamrun Nahar Setu *** ID: 201510287
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3. ◦Multinational Corporation (MNC), sometimes
called transnational corporation or international
corporation, is a business that produces or
distributes products or services in one or more
foreign countries by establishing a branch or
affiliate there.
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4. ◦ A branch is a part of a company that is located in another
country.
◦ An affiliate is a company partially or entirely owned by
another company.
◦ MNCs engage in foreign direct investment (FDI)—that is,
investment in one country by citizens of another country.
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5. Types of investment:
◦ Acquiring an existing company. (Airtel - AT&T.- Cingular
Wireless – Digicel).
◦ Merging with another company (CIBC and Barclays = First
Caribbean)
◦ Creating new facilities or activities. These are referred to as
greenfield investments.
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6. ◦ Large multinationals have budgets that exceed those of the
country they are operating in.
◦ MNCs can have a powerful influence in the local economy.
◦ They can have a significant impact on government policy,
mainly by threatening to close their operations
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7. ◦ Multinational corporations play an important role in
globalization
◦ MNCs develop new products in their native country and
manufactures them abroad, often in Third World nations,
where labour is cheap.
◦ Almost all the largest multinational firms are American,
Japanese, or West European
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8. Levi's Factory in South Africa
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9. MNCs in the Caribbean
◦Cable and Wireless
◦Digicel
◦Price Waterhouse Coopers
◦Courts
◦Sunsail Club Colonna
◦Sandals
◦Hilton
◦Four Seasons
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 Royal Bank of CanadaRoyal Bank of Canada
 First Caribbean PriceFirst Caribbean Price
 Scotia BankScotia Bank
 Stanford DevelopmentStanford Development
CompanyCompany
 TexacoTexaco
 ShellShell
 AlcanAlcan
 Tate and LyleTate and Lyle

10. ◦ MNCs have always featured in Caribbean economies.
◦ The Colonial office encouraged UK companies to invest in the
colonies
◦ After WW II, the region tried Industrialization by Invitation.
Under this scheme companies were given incentives to set up
industries in the Caribbean e.g. tax holidays, factory sheds,
exemption from duties on imports etc.
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11. Advantages of MNCs
◦EmploymentEmployment – jobs will be created in
construction, banking, manufacturing, or tourism
sector
◦Foreign exchangeForeign exchange – this will be generated from
tourism, bauxite, petroleum.
◦Transfer of technologyTransfer of technology – workers can be trained
while working in the MNC and then move to
other firms with their skills. Also domestic
producers can copy the technology and best
working practices of the MNC.
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12. ◦ TaxesTaxes – MNCs pay taxes and thus contribute to significant
revenue to government’s finances.
◦ Development of infrastructureDevelopment of infrastructure – some MNCs may develop the
infrastructure of the area where they are located, or
government may do so to accommodate or attract the MNC.
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13. Disadvantages of MNCs
◦ Closure of local firmsClosure of local firms – MNCS can dominate the
domestic market which can lead to the closure of
domestic firms. They can produce and sell goods and
services cheaper than the domestic producers thus
lowering domestic profits and investments
◦ Repatriation of profitsRepatriation of profits – the bulk of profits may be sent
back to their shareholders in the home country.
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14. ◦ Reduced gain for the hostReduced gain for the host country – governments will give tax
concessions, rent free sites, government contracts to MNCs as
incentives. The more they give the less they gain.
◦ Non-transfer of technology and skillsNon-transfer of technology and skills – MNCs may guard the
skills and technology they possess
◦ MigrationMigration – migrants may move to a country to seek
employment. This may put a strain on the social services of the
host country.
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15. ◦ Environmental damageEnvironmental damage – MNCs may exploit a country’s natural
resources without any attempt to preserve the environment.
The increased use of herbicides and pesticides, the
indiscriminate dumping of waste generated by hotels and
cruise ships will lead to environmental degradation.
◦ Political influencePolitical influence – MNCs often exert considerable power and
influence over political leaders, the police and civil servants.
They may sometimes meddle in local politics.
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16. Recommendations
◦A new development strategy underpinned by political
will.
◦The pooling of efforts and resources among
Caribbean nations
◦Regional integration
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17. Sources
◦ The Caribbean in the Global Political Economy, edited by
Hilbourne Watson
◦ Storm Signals, Cathy McAfee
◦ The Caribbean – Survival, struggle and Sovereignty, Catherine
Sunshine
◦ Consequences of Structural Adjustment: A Review of the
Jamaican Experience, Editor, Elsie Le Franc.
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