Should developing countries fear multinational enterprises
A multinational company is an organisation which own or controls production or service facilities outside the country in which it is based. This means that they do not just export their products abroad, but actually own production facilities in other countries. These companies usually have their head office in a developed country such as the UK or the USA and have their production facilities in developing countries such as Nigeria or Taiwan. To answer the question of whether developing countries should fear multinational enterprises the aspect of fear needs to be considered and whether this is the appropriate term to use. The actions and policies of multinational companies in developing countries also need to be examined with the negative and positive effects of these actions and polices being weighed carefully to determine whether developing countries should in fact fear multinational enterprises. There is a great debate as to the effects of multinational enterprises. Multinational companies have had much criticism for the actions and policies in developing countries, however there are a number of clear benefits associated with multinational countries operating in developing countries. One of these benefits is the effect the multinational company on the employment and balance of payments of the developing country in which it operates. ... Multinationals can also benefit the countries balance of payments if their products are sold abroad. Most multinationals make a positive contribution to the economic growth of developing countries through their investments, products and services. ... The benefits for host countries from a multinationals presence vary according to its structure, product range, services and sphere of activity. The benefits of multinational companies can only fully be appreciated with suitable regulatory and financial conditions, a dependable legal system, an adequate infrastructure and a well-functioning government. However, the absence of these factors has lead to the conflicting opinions over the effects of multinationals in developing countries. Multinational companies have come under much scrutiny due to their association with bad working conditions and pay for their workers and the negative impact that they have on the environment in which they operate. The scepticism associated with multinational companies is often partly based on the negative experiences in the late 1960s and early 1970s, with blatant examples of unethical behaviour demonstrated by foreign companies in developing countries, for example, the inappropriate influence of political decisions, exploitative wages and poor social conditions. Multinational enterprises face a conflict of interests, from where the controversy arises concerning their activities in the developing world.