midterm question 1

Question 1

MNC's are complex organizations however, they dominate the worldwide market. Knowing the background and nature of MNC's, answer the following:

1. Identify the benefits and disadvantages of MNC's.

ans:

Multinational companies do bring some benefits to developing countries. They provide jobs and increase the wealth of the local people. The country gains some wealth by way of taxes.Their market would be much bigger, more sales.Take advanMultinationals have played an important role in globalization. Countries and sometimes subnational regions must compete against one another for the establishment of MNC facilities, and the subsequent tax revenue, employment, and economic activity. To compete, countries and regional political districts offer incentives to MNCs such as tax breaks, pledges of governmental assistance or improved infrastructure, or lax environmental and labor standards. This process of becoming more attractive to foreign investment can be characterized as a race to the bottom, a push towards greater freedom for corporate bodies, or both.

2. Identify one MNC company and describe its operation.

ans:

Jollibee, Jollibee is an American-style fast-food restaurant with Filipino-influenced dishes specializing in burgers, spaghetti, chicken and some local Filipino dishes. Currently the biggest fast-food chain in the country, it also has locations in the United States, Saudi Arabia, Hong Kong, Vietnam, Malaysia, Indonesia, Dubai and Brunei. Jollibee is also the name of their mascot, a large bee in a blazer, shirt and chef's hat. they offered a franchise for those who want to be grow with there and for the franchiser they less time and the business is stable in economic aspect and they gained more profits.

3. Describe how the parent control/coordinates with its subsidiaries in other countries or region.

ans:

the parents control/coordinates with subsidiaries in other country or region by monitoring if the business is profitable or stable and they assured that all the franchiser they buy the product from the mother company and also they contributing in the advertisement by minimizing their expense in promotional activities because of their many branches or franchising the food chain.
4. How is IT maximized or used by this MNC?

ans:

the Information technology is maximizing using by the MNC because every transaction in the different country and region are monitored by the mother company to know the everyday transaction that happen in the daily operation and to know what is the latest trends in the market, and to monitored if the branches in that particular region and country are gaining profits or they need another supply for the firm.

5. WHat were the weaknesses/problems encountered by this MNC from its environment and global Multinational companies pay taxes to the country in which they earn the money.etup?

ans:
the weaknesses of the Multinational Company are the environment if that place they choose is good or not, for example in Iraq do you think if you put the business in that country you gain profit because of their economic condition? it so hard to put up in the area that their economic condition are not stable. in addition the problem of the MNC for example may pursue policies that are home country-oriented, the mother firm cannot exercise any managerial control,However, there are some problems as well. The jobs are often low-skilled and poorly paid. Much of the profit will go out of the country, and the company may pull out to relocate in a country where it can make a greater profit. Multinational companies are primarily interested in making profits for their shareholders. Paying wages is an expense that the company will try to reduce to as low a level as possible.

Cite your reference:

http://www.scalloway.org.uk/trad4.htm

http://en.wikipedia.org/wiki/Jollibee#Products_and_locations

arthon Gantongan M.