Negative impact and implications of the working of MNCs

Negative effects of MNCs

September 21, 2008 Sree Rama Rao Sales/Marketing Management

From the global point of view, MNCs may actually combine leading to an anti-competitive resources allocation and territorial allocation of markets. Their market power may serve as an effective barrier to the entry of competitors. This could lead to growing concentration and monopolization in world markets. So far, however, the evidence, suggests that markets have become less concentrated through time. Given their weight, they are sometimes in a position to wield substantial to wield substantial policy making influence in host as well as home countries.

The role of MNCs in developing countries has been subject to severe criticism. Some points of criticism are cited below:

1. MNCs exploit local labor and resources by paying relatively lower prices ______ _____ ______ ______ _____ ________ _______ _______ ___ _________ _________ _____.
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