The Opportunities for Multinational Companies to Shift Resources Term Paper - 2

The Opportunities for Multinational Companies to Shift Resources around the World - Term Paper Example At a superficial glance, when a multinational invests in a country overseas, the partnership seems beneficial. Both the parties seem to profit. The multinational company finds a new domain to practice business on, while the country involved benefits due to the creation of jobs in its economy as well as the expansion in the consumer market due to the addition of the MNC’s product. There is, however, a more deep-rooted impact of this operation, which implies increased benefit for the MNC and less benefit for the developing country. The nation-state, which allows the multinational to operate within its borders, seldom sees the profit from the company’s operations (Chen, pp. 136, 2003). Multinational company, upon earning this profit, will whisk the profit out of the country to its own origin and home. Resultantly, even when million-dollar companies enter a developing country’s market, the million-dollar profit is not beneficial to the country itself in any way. If e valuated by the subjective eye, the situation can appear as if the MNC exploits the hosting country for its cheap labor and consumer market, while paying back only the bare minimum in the form of wages, while earning a massive profit as well as a beneficial expansion in operations. The operations of a multinational consist of combining the expertise (especially new technology) and the stock capital of the multinational with any opportunities the MNC may find in other countries in the form of cheap labor and other resources, leading to an increased output (Toyne, pp. 42, 2009). The result is often a substantial profit that the investors in the multinational divide amongst themselves and take home.