How A Mnc Effect Or Effected By Home & Host Country Environment

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EXECUTIVE SUMMARY The purpose of this report is to define & understand how a MNC effect or effected by Home & Host country environments. Due to increasing global competition, changes in economic & political system business organisation are facing rapid change in business environment. The world is separated politically & financially into 200 countries separate countries where each country has its own laws, judiciary system and boundary regulations. We will be discussing how a MNC adapt these differentials and contribute to improve the economy and standard of living of the society. Multinational corporations have a huge impact on the host country economy as well as there are some problems also created by MNC in host country. For the view of…show more content…
Entering into foreign countries for business need to develop cordial relations as a priority for performing smooth business practices. Problematic situations do occur sometimes between two countries on parameters like infrastructure, institutional services, labour, tax reforms. The best solution is to adapt the cultural and national environment of host country to avoid any crisis. Emerging or developing countries can avail the chance to grow with such partnerships. IMPACT OF MNC IN HOST COUNTRY Welcoming MNC’s by developing countries provide them with lot of benefits. MNC’s identify need of such market and help them to grow economically and socially. The point of concern is the size of investment in the host country. Although government promotes FDI by attracting MNC’s with comfortable investment schemes and subsidies. But still FDI has its own advantages and disadvantage for Host & Home country. BENEFITS FOR HOST COUNTRY 1. DIRECT FLOW OF CAPITAL-When a company enters to foreign market with huge investment and cash flows there is possibility of change in import and export pattern. MNC generally benefit with low production cost facilities available in host countries, this promotes the export in host country. 2. INCREASE IN EMPLOYMENT- MNC entering into any developing nation comes with best thing i.e. creating the maximum employment. Cost effective labour in host countries is two ways beneficial parameter for both
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