Essay About Mncs

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A third criticism is MNC exploitation of domestic resources.Conglomerated MNCs produce different or even totally unrelated goods in various countries. The phenomenon of MNCs is not new, instead tracing back to the late 18th century when firms like the British, Dutch, and French East Indian companies sought raw materials overseas.The modern-day counterparts of these raw material-seeking firms are the multinational oil and mining companies, as recent advances in transportation and communications technology increased the feasibility of global production, enabling MNCs to grow rapidly over the past 60 years.One of the most important phenomena of the latter half of the 20th century in international business was the emergence of the multinational corporation (MNC).The many different definitions of MNCs usually rest on one of the following common characteristics: (a) company headquarters far removed from the country where the activity occurs, (b) foreign sales representing a high proportion of total sales, and (c) stock ownership and management that are multinational in character.Furthermore, a good deal of two-way foreign direct investment occurs among industrial countries: U. firms expand their European subsidiaries and at the same time European firms expand their U. The three largest MNCs worldwide in 2006 were Exxon Mobil, with headquarters in the United States and revenue of 9.9 billion; Wal-Mart, with headquarters in the United States and revenue of 5.6 billion; and Royal Dutch Shell, with headquarters in the Netherlands and revenue of 6.7 billion.MNCs can create several problems in the home country.When Salvatore Allende, the president of Chile, was in the process of winning the presidency, U. businesses opposed him, fearing that his government would expropriate their Chilean operations.Specifically, International Telephone and Telegraph (ITT) tried to prevent his election and subsequently attempted to foment civil disturbances that would lead to his fall from power.In order to mitigate the harmful effect of MNCs and increase the possible benefits in the host country, several nations have attempted to regulate their conduct.Some developing nations now allow only joint ventures (i.e., local equity participation and set rules for the transfer of technology and the training of domestic labor); impose limits on the use of imported inputs and the remission of profits; set environmental regulations; and so on.


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