Essay on Multinational Companies Essay

Multi matter companies be hulk firms with their origin in one commonwealth, moreover their operations extending beyond the boundaries of that nation. For reasons of marketing, monetary and proficient superiority, these trans interior(a)s ar gener aloney considered as a sine qua non of the modernisation of an parsimoniousness.They get hold of been creditworthy for the fast stinting liberalisation in India in 1991, the question of the entry of multinational cans (MNCs) has assumed significance.Multinationals federations, closely from the United States, japan and other(prenominal) industrialised nations of the world, have entered our life in a vauntingly way. Foreign investment proposals and commercial conglutination have been signed on an strange scale, thus giving rise to the controversy whether these multinational corporations atomic number 18 our saviours or saboteurs.This is so because of the vital difference between the economies of develop and growth nation s. This requires that the entry of multinational corporations in India be examined from this angle.According to A.K. Cairn cross, It is not possible to buy development so cheaply. The provision of unconnected capital of the United States whitethorn yield a more decent 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 imperative in the context of the economic growth and modernisation of developing economies where wide-cut investment avenues lie open and hitherto collectible to lack of capital and proficient know-how, these potentials remain unexploited.Multinational corporations help in reorganising the economic infrastructure in quislingism with the domestic sector through financial and technical help.If we consider the case of our country immediately after Independence, ourswas an agrarian miserliness with a weak industrial m odest and low level of savings.Though the prevalent sector was supposed to cure these ills, with problems wish paucity of funds, lack of technical know-how and other amenities, it seemed an impossible proposition. Hence, the help of multinational corporation was sought in terms of fi poof and applied science.As a consequence of the open sector multinational corporation nexus, from a miniature one, the Indian industrial economy assumed colossal dimensions and India is considered one of the close to industrialised nations of the world today.However, there is another school of thought, which denounces multinationals as an extension of imperia make exponent and potency source of maturation of the Least Developed Countries (LDCs) by the unquestionable economies of the world.According to them, MNCs are an expensive sight for a developing economy from the outside exchange point of view. These days when developing countries are struggling with massive foreign debts and their devel opment plans are held up due to paucity of funds .this may be considered a serious drawback.Second, multinationals evade nonrecreational taxes in most countries by concealment receiptss. Government agencies entrusted with the task of collecting the taxes and scrutinising their accounts are often bluffed by them as they do not know enough close to the industries they are asked to deal with.Third, multinationals often cater inappropriate technology to the developing nations. The technology provided by them is very often too cultivate to adopt or too authoritative by international standards. Further, transfer to technology in accordance with resource endowment of LDCs involves high bell and this may balk 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 clincher of its price policy, which ensures profit at the cost of high level of consumption at a lower price. Even the shock absorber of high productivity brought about by them through the technology-cal advancement is not causative to the working class because of pre-determined level of profit under oligopolistic criterion.Fifth, concentration of economic origin is the main charge against MNCs.This economic tycoon is often used to distort national politics and international relations by multinationals. These attempts build up a power entity of their own. They never hesitate in exploiting the complaisant and political weakness and economic retardent 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 smorgasbord of virtues and vices, boons and banes.Charges levelled against multinationals are serious, yet it also stiff a fact that, notwithstanding all these disastrous consequences of their working, multinationals have emerged as the most dominant inst itutions of the late twentieth century. As such, third world countries in general, and India, in particular, volitioning have to deal with multinationals despite their ugly designs.The Government must, therefore, have an optimally balanced policy towards MNCs after weighting the miscellaneous pros and cons of the issue.It would not go for foreign collaborationism in areas where adequate Indian skills and capital are available. Whenever the need for foreign collaboration is felt in areas of high priority, fury should be on purchasing limitless technical know-how, technological skills and machinery. But only(prenominal) 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 flavour goods and services to the country. They will reward enterprise and talent the inefficient would, of course, have no place in the new lineation of things. Hence, the hue and cry by provoke party, who, dub MNCs as saboteurs.Multinational corporations will demand efficiency, punctuality and dedication things which are deadly lacking in national life today. They will demand a certain work culture from the employees as well as the employers besides whirl 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 spheric economic power in the adjoining century. And multinational corporations are the only answer.