MNCS

The Impact of MNCs on the Local Economy

A multinational company (MNC) is a business which operates from a location in at least one other country in addition to its home country.

Employment

MNCs can affect local economies as they provide employment and reduce unemployment through job creation.
MNCs can affect local economies by providing wages and salaries to employees.

Competitiveness

MNCs can affect local economies as they may increase competitiveness and reduce the number of local businesses.
MNCs are likely to benefit from global economies of scale from selling in hundreds of countries. This lowers their unit cost and local businesses may not be able to compete.
Imagine a local drinks producer competing with Coca Cola on price!

The community

MNCs can affect local economies as they provide goods and services for the local community.

Exploitation

MNCs can affect local economies as they exploit poor working conditions which may be legal in foreign countries, but which would not be used in the home market.
MNCs can affect local economies as they may prioritise profit and therefore use cost-effective non-renewable resources which harm the environment.
For example, Primark was accused of exploiting poor working conditions and child labour in overseas countries which affects that country’s local economy. However, what is the opportunity cost of not doing that work?

The Impact of MNCs on the National Economy

A multinational company (MNC) is a business which operates from a location in at least one other country in addition to its home country.

Illustrative background for FDI ?? "content

FDI

MNCs can affect national economies as they engage in foreign direct investment (FDI) which increases demand and supports growth.
FDI can provide jobs in the local construction industry, as well as the jobs created by any project directly.

Balance of payments

MNCs can affect national economies as they often export to other countries which increases the balance of payments surplus for that economy.

Opportunities

MNCs can affect national economies by offering training and development opportunities which allow for the development of skills.
MNCs training local people in skills to high international standards may be beneficial for that nation.

Economic growth

MNCs can affect national economies as they offer consumers employment and income which can support economic growth.

Tax revenues

MNCs can affect national economies as they provide tax revenues through the sale of goods and services.
- For example, Starbucks contributed £8.1 million in taxation to the UK government, although many argue this was unethical as Starbucks tactics to reduce its overall tax bill.

1Exploring Business

2Marketing Campaigns

2.1Marketing

2.1.1Setting Marketing Objectives

2.1.2Customer Needs

2.1.3The Market

2.1.4Competition & The Market

2.1.5Consumer Behaviour

2.1.6Market Research

2.1.7Forms of Market Research

2.1.8Market Segmentation

2.1.9Cultural & Social Factors in Marketing

2.1.10Promotional Decisions 3

2.1.11Pricing Strategies

2.2Marketing Mix

2.2.1Marketing Mix

2.2.2Product Life Cycle

2.2.3Pricing Decisions & Price Skimming

2.2.4Pricing Decisions & Price Penetration

2.2.5Promotional Decisions

2.2.6Promotional Decisions 2

2.2.7Promotional Decisions 3

2.2.8Market Mapping

3Business Finance

3.1Sources of Finance

3.1.1Internal Finance

3.1.2External Finance

3.1.3External Finance 2

3.1.4Sources of Business Finance

3.2Financial Planning

3.2.1Revenue

3.2.2Costs

3.2.3Cash & Cash Flow

3.2.4Cash & Cash Flow 2

3.2.5Break-Even Analysis

3.2.6Profits

3.3Financial Statements

3.3.1Balance Sheets

3.3.2Income Statements

3.3.3Liquidity

4International Business

4.1Globalisation

4.1.1Growing Economies

4.1.2Specialisation & Trade

4.2International Business

4.2.1Internationalisation

4.2.2International Trade

4.2.3MNCS

4.2.4Conditions that Prompt Trade

4.2.5Assessment of a Country

4.3International Economic Environment

4.3.1Globalisation

4.3.2Factors Contributing to Globalisation

4.3.3Protectionism

4.3.4The EU & the WTO

4.3.5Trading Blocs

4.4Factors Affecting International Business

4.4.1Global Competitiveness

4.4.2Ethics of Global Business

4.4.3Controlling MNCs

4.4.4Cultural & Social Factors in Marketing

5Principles of Management

5.1Management & Leadership

5.1.1Managers

5.1.2Management Theories

5.1.3Managing Organisational Culture

5.1.4Management Style

5.2Theories of Motivation

5.2.1Motivating & Engaging Employees

5.2.2Taylor's Theory

5.2.3Mayo's Theory

5.2.4Maslow's Theory

5.2.5Herzberg's Theory

5.3Managing Change

5.3.1Change

5.3.2Key Factors in Change

5.3.3Scenario Planning

5.3.4Managing Change

5.3.5Managing Strategic Implementation

6Business Decision Making

6.1Business Principles & Practices

6.1.1Influences in External Environments

6.1.2Product Decisions

6.1.3Competitive Environment

6.1.4Corporate Strategy

6.1.5Quantitative Sales Forecasting

6.1.6Legislation

6.2Quality Management

6.2.1Importance of Quality

6.2.2Measuring Quality

6.2.3Total Quality Management

6.2.4Evaluating TQM

6.3Human Resources

6.3.1Contracts

6.3.2Recruitment

6.3.3Training a Workforce

6.4Documents & Business Decisions

6.4.1Sales Forecasts

6.4.2Managing Strategic Implementation

6.4.3Problems with Strategy

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