Tuesday, April 26, 2011

Multinational Corporations and Protectionism


Our chapter this week focuses on multinationals and outsourcing jobs. It also examines the regional cross-border investments. Recall our discussions on Enron and Walmart and tell me what are some advantages a multinational gains by being large and operating in many different countries? What are some disadvantages?

Feel free to use another corporation's example, other than the ones listed above.

9 comments:

  1. Multinational corporations are "large corporations with operations and subsidiaries in several countries". http://dictionary.reference.com/browse/multinational
    Businesses such as Walmart and Enron are well known for their successes and failures. By being such large corporations, it could be an advantage or disadvantage. Some advantages include opening up more job opportunities because if the company grows, there will be a need for more workers to do the work. By adding more jobs, unemployment rates would decrease and there would be greater cash flow in our government because more people are able to pay their taxes. By operating in many different countries, the company name will be greater. People will recognize the growth and projection that this company is good because it is growing so much and pretty soon a company like Walmart will be the place to go for a certain item. With the satisfaction from the large companies, consumers will return for other needs in the future. Since the company is doing well, other smaller companies might want to merge to create a stronger business chain. Some disadvantages include competition between other large rival companies such as the example of Walmart and Target. There two companies are both multinational and produce the same kinds of products. Another difficulty would be that everyone is watching the future of the company, if at one point there is a mess up, people will look at the company with shameful eyes and look for other stores. Large companies are always on the watch and if something bad happens, everyone will know.
    http://wiki.answers.com/Q/What_are_the_advantages_and_disadvantages_of_multinational_businesses

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  2. Big business means large production. We see that Wal-Mart produces many different products, as it is a "super store". This makes Wal-Mart have an advantage over all smaller stores in the area in which it occupies. More people are going to go to a large place where they can get cheap products- all in one stop. We also see that since Wal-Mart has stores all over (being multinational), they have a wider range of people that they can reach out to and have buy their products. Some disadvantages include the media. For example, if there is one slip in the ethics of a business, then people begin to look at it and criticize. This is because the business is so large that people know it by the name. If people start noticing the faults in a large business, they may stop shopping there. Although this may not fully shut off production or profit, this will definitely slow them down.

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  3. Nick MW/U Mike R 1*April 28, 2011 at 8:40 AM

    If a company is large and operates in other countries then it has a better chance of making larger profits. Companies out source jobs to other countries to save on manufacturing costs. For example Walmart has a large base in China. They are able to have inexpensive products because the cost of making products is cheap. On the other hand though, if a product is cheap then the quality of the item is poorly made. With a larger base, the company is able to create more jobs and help contribute to the economy. Some disadvantages to having a larger base in other countries is that they are out sourcing jobs. This causes jobs to be lost in America. With the loss of jobs unemployment will rise and cause the economy to shrink. If a company becomes too large then it might have too much pull in the economy. For example, with the collapse of Enron, it caused the American economy to virtually collapse.

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  4. Being at the top of a multinational business is one of the best jobs you can have. You're earning at least a seven figure salary along with all the executive perks and advantages. Of course if you have a conscious and care about moral ethics then it may not be the best business for you. For example, most big business like that outsource their employees, which means they higher people from third world countries. It's basically legal slavery because the business can pay them, the employees, anything they, the multinational business, wants. This type of business has many unethical parts and players but if you can ignore the little angel on your shoulder then it can pay off greatly.

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  5. There are many great things about being part of a large corporation. By being a major company can either be a good thing or a bad thing. Some benefits can be increasing the investment level and they also increasing the amount of exports to a country. In order for them to be successful they need to adapt to the culture of the country in which they are in. An example of a big corporation would be McDonalds, who has adapted to the culture in order to satisfy the people. An advantage is also that a business will be very successful earning millions of dollars if they have a good business plan, but a disadvantage would be not satisfying the country where they are. An example of this would be Wal Mart who had a disadvantage because they could not adapt to the German culture and ended up losing about a billion dollars. "The biggest example was “When Wal-Mart expanded in Germany in 1997, it hoped that Germans, like Americans, would scoop up its low-priced items. By July 2006, Wal-Mart had closed its German operations and absorbed $1 billion in losses. This was because they didn’t adjust to the German culture where people preferred frequently specialty stores, not one-stop shops (Stern pg A07)”. Also a company has to remember ethics and treat their employers the right way or they'll end up like Enron and Wal-Mart. If the public finds out that they are not following ethics there might be a decrease in profits.

    http://en.wikipedia.org/wiki/Multinational_corporation

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  6. Some advantages of being at the top of a large multinational corporation are that you are earning a lot of money. Many of these large corporations like Wal Mart, sell goods for much cheaper than other stores. Consumers try to look for the better price so they can save money. The disadvantages of being a large multinational corporation are that they do not pay their employees enough money for the amount of work that they do. Many of these companies are not ethical and treat their employees unfairly which may cause them to lose business.

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  7. Being a large company with worldwide stretching companies is always and advantage, because they can by pass laws that may make certain things illegal in other countries, ie. sweat shops. Also being closer to the raw materials you need is a big plus.
    The disadvantages are you could have a large following of haters, people won't like you for playing the business game, and for being so successful.

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  8. Some advantages of being a large multinational worldwide company include the fact that they bring advanced technology to poor countries and they sell low cost items. They are vital for global investment and spreading technology worldwide. They bring about new economic opportunities, helps companies that have poor management by taking them over and making those businesses become successful. They "Allow entire world to improve their standard of living and provide access of quality product to entire world regardless of place." (http://www.scribd.com/doc/25239404/Pros-and-Cons-of-Multinational-Companies) Some of the cons include the fact that workers who have high wages oftentimes lose their jobs, sweatshops are involved in making the products for the big companies such as Walmart, these big companies can be manipulative and trick people into buying their products. Some of their products are tested on animals and have artificial ingredients. They "Make it harder for government to raise revenue, protect the environment, and promote worker safety (a fall in social protections)" (http://www.scribd.com/doc/25239404/Pros-and-Cons-of-Multinational-Companies) They are also mostly interested in money and making a profit and neglect their workers and natural resources.

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  9. One of the advantages a multinational gains by being large and operating in many different countries is that it will make more sales because if it is all around the world there will be more people to buy what they have to offer. The second advantage would be that if the company has a factory in 3rd world countries it will get much cheaper labor therefore decreasing cost and increasing profit. Another advantage would be that the company would just be a lot more powerful in general and would become a lot more valuable. Another advantage would be the creation of more jobs which means less unemployment and less poverty. The disadvantage to a large multinational company such as walmart would be that everyone in the media would be keeping a close look at how the business operates and if anything at all is found to faulty or unethical it would ruin the company’s name because everyone would generalize that that is how the entire company operates.

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