Multinational companies allow operators to expand operations and derive profits from multiple countries. MNCs also bring jobs and access to products and services to countries of operation. However, MNCs are more complex to operate, and they face criticism for profit-centric motives and cultural influence.Know More
For companies that have saturated a domestic marketplace, becoming an MNC is one of the only remaining paths to growth. Offering products in different parts of the world can also lead to global synergy, where a company brand takes on greater significance because of global communication than it does in a domestic-only market. A global business is also able to take advantage of free movement of supplies and goods to coordinate an optimal global strategy and cost structure.
MNCs sometimes face stiff resistance from foreign governments and citizens. Governments have concerns about the political and economic power that MNCs can gain by drawing on locals for profit. Also, MNCs sometimes come in and present jobs and economic value, but end up leaving or relocating. For the business itself, despite the opportunities, managing the operations of an MNC is more involving than managing a domestic company. In the area of human resources, it is difficult to create a stable organizational culture with employees from diverse backgrounds working for the business in each country.Learn more about Corporations
Some advantages of a private limited company are limited liability, ease of use and that it is a legal entity; disadvantages include the required paperwork, limited growth and the expenses involved. Limited companies are small businesses usually comprised of family or close friends. These companies may issue stock, but do not trade on the public exchange.Full Answer >
Multinational companies face various cultural problems such as understanding societal trends to individualism versus collectivism, time relationships, language barriers and cultural traditions. Nevertheless, many multinational firms have successfully tackled such issues and thrive in international markets.Full Answer >
Mergers and acquisitions may bring significant financial benefits if all goes well, but result in financial losses and a less productive workforce if they do not work as planned. Mergers and acquisitions can help companies tap into new markets, cut down on the costs of research and development and expedite growth. However, they may be costly to implement and lead to reduced worker productivity and failure to meet stakeholder expectations.Full Answer >
Partnerships are advantageous because they allow for the sharing of financial responsibilities, they are easy to start and they offer complementary skills. Disadvantages of partnerships may include frequent disputes, sharing of profits and joint liability. Partnerships are businesses owned by two or more people, notes the United States Small Business Administration (SBA).Full Answer >