Multinationals

• Multinational

  • A business (usually a limited company) that has operations in more than one country and the head office usually based in the home country.
• Advantages of Multinationals

  • They can take advantage of grants being issued by governments to locate in the countries.
  • They can avoid certain quotas and tariffs issued by their own government.
  • wages and raw materials often cost lower in foreign countries they operate in.
  • Can avoid legislation in their home country
• Quotas

  • Limits the number of imports and exports
• Tariffs

  • Taxes on imports and exports
• Disadvantages of Multinationals

  • Languages barrier can slow down communication.
  • Culture differences can affect production.
  • Exchange rates can affect purchasing and paying expenses in different countries.
  • Time differences can hinder communication between head office and branches located elsewhere in the world.