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What are the advantages of multinational companies?

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Quick Answer

The advantages of multinational companies include bringing jobs to new employees, stimulating local economies and introducing valuable technologies. Multinational corporations benefit their home countries and territories overseas by contributing to tax bases in all locations and enabling currency flow and exchange. These businesses often reduce the costs of producing goods and make products cheaper for consumers.

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Full Answer

Multinational corporations are classified as such when their headquarters reside in one country, and satellite facilities operate in others. These companies include many large retailers, such as Nike, Reebok and Walmart. Engaging in multinational operations benefits companies and their consumers. Companies often enjoy cheaper labor and lower cost of product parts, which in turn enables larger production volumes.

Expanding overseas helps companies to reach new markets, in turn enabling growth and sales. Some businesses enjoy a lower tax rate upon opening facilities overseas. Some pursue international business opportunities with persuasion from federal governments that offer grants for businesses engaging in international commerce.

Multinational organizations enjoy higher-skilled and more efficient work forces than smaller companies. They hire large numbers of employees specializing in diverse areas; employees enjoy performing limited roles within their capabilities, which in turn ensures quality production and minimizes risks of error.

In addition to benefits, holding international locations produces some drawbacks too. International companies, for instance, draw criticism for employing workers at low wages and falling short of sound social responsibility performances.

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