Essay on Multinational Companies Essay

Multinational companies atomic number 18 giant firms with their origin in one country, but their operations extending beyond the boundaries of that nation. For reasons of marketing, financial and technological superiority, these multinationals atomic number 18 generally considered as a sine qua non of the modernisation of an thrift.They leave been obligated for the rapid economic liberalisation in India in 1991, the question of the origination of multinational corporations (MNCs) has assumed significance.Multinationals corporations, mostly from the United States, Japan and other alter nations of the serviceman, have entered our life in a big way. distant investment proposals and commercial alliance have been signed on an r atomic number 18 scale, thus giving rise to the controversy whether these multinational corporations be our saviours or saboteurs.This is so because of the vital difference between the economies of actual and developing nations. This requires that the door of multinational corporations in India be examined from this angle.According to A.K. Cairn cross, It is not likely to buy development so cheaply. The provision of foreign slap-up may yield a more adequate infrastructure, but rarely by itself generates rapid development unless there are already large investment opportunities going a beggingThat is why the intervention of multinational corporations is imperious in the context of the economic growth and modernisation of developing economies where colossal investment avenues lie open and yet due to pretermit of capital and technical inhabit-how, these potentials remain unexploited.Multinational corporations help in reorganising the economic infrastructure in collaboration with the domestic sector through financial and technical help.If we consider the case of our country immediately after Independence, ourswas an agrarian thriftiness with a weak industrial base and low level of savings.though the existence sector was sup posed to cure these ills, with problems like paucity of funds, lack of technical know-how and other amenities, it seemed an impossible proposition. Hence, the help of multinational corporation was desire in terms of finance and technology.As a consequence of the public sector multinational corporation nexus, from a miniature one, the Indian industrial delivery assumed colossal dimensions and India is considered one of the most industrialised nations of the world today.However, there is another school of thought, which denounces multinationals as an extension of imperialist super function and potency source of exploitation of the Least Developed Countries (LDCs) by the developed economies of the world.According to them, MNCs are an expensive bargain for a developing economy from the foreign exchange point of view. These days when developing countries are essay with massive foreign debts and their development plans are held up due to paucity of funds .this may be considered a ser ious drawback.Second, multinationals evade paying(a) taxes in most countries by concealing profits. Government agencies entrusted with the task of hoard the taxes and scrutinising their accounts are often bluffed by them as they do not know enough ab aside the industries they are asked to deal with.Third, multinationals often provide distant technology to the developing nations. The technology provided by them is very often too modern to adopt or too absolute by international standards. Further, take to technology in accordance with resource endowment of LDCs involves high embody and this may prevent MNCs from transferring appropriate technology to these countries.Fourth, some of the evils of the multinationals emanate out of theiroligopolistic character. Collision is the main determinant of its price policy, which ensures profit at the appeal of high level of consumption at a lower price. notwithstanding the impact of high productivity brought about by them through the techn ology-cal packaging is not conducive to the working class because of pre-determined level of profit under oligopolistic criterion.Fifth, concentration of economic power is the main charge against MNCs.This economic power is often used to distort national politics and international relations by multinationals. These enterprises build up a power entity of their testify. They never flicker in exploiting the social and political weakness and economic backwardness of the LDCs to their own benefit.A multinational corporation is neither a saviour as its protagonists claim, nor a saboteur as its detractors make it out to be. It is a mix of virtues and vices, boons and banes.Charges levelled against multinationals are serious, yet it also remains a event that, despite all these disastrous consequences of their working, multinationals have emerged as the most ascendent institutions of the late twentieth century. As such, third world countries in general, and India, in particular, will h ave to deal with multinationals despite their ugly designs.The Government must, therefore, have an optimally balanced policy towards MNCs after weighting the various pros and cons of the issue.It would not go for foreign collaboration in areas where adequate Indian skills and capital are available. Whenever the need for foreign collaboration is felt in areas of high priority, vehemence should be on purchasing out duty technical know-how, technological skills and machinery. barely only if this is not possible, should MNCs be allowed to operate in India?Once these safeguards are taken, multinational corporations will give an uplift to national economy by bringing in quality goods and services to the country. They will reward enterprise and talent the inefficient would, of course, have no place in the refreshing scheme of things. Hence, the hue and cry byinterested party, who, dub MNCs as saboteurs.Multinational corporations will demand efficiency, punctuality and dedication things which are blistering lacking in national life today. They will demand a certain work culture from the employees as well as the employers besides offering the best of goods and services to their clientele.They should, therefore, be viewed as saviours of national economy rather than saboteurs because we have seen where our previous policies, have landed us right at the bottom of the list of industrialised nations. The economy has steadily picked up since the liberalisation measures were introduced.This must continue if we are to emerge as a global economic power in the next century. And multinational corporations are the only answer.