Advantages and Disadvantage of Going Global – Essay – Derekhth
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Advantages and Disadvantage of Going Global
It is well-known to us that the advantages for a multinational organization are abundant. As far as my knowledge concerned, there are also some drawbacks with expanding the business to different counties. It is better for a company to carefully consider and analysis before deciding whether enter the foreign market.

The first advantage comes to people’s mind of a multinational company must be the reduced labor cost. The ability to source labor cheaply is a tremendous benefit to a company. This not only can quickly maximize a company’s profit but also to build a positive relationship with employees by supplying job opportunity in some depressed areas. The opportunity to access larger market is the second reason for most companies operate aboard. Many companies have demonstrated how important and profitable that able to access a larger market. KFC is one of America’s biggest fast-food chain, but the US isn’t the company’s biggest market, KFC generated more profit in China. (cnbc.com) The third advantage of a multinational organization is tax saving. Companies are able to run independent arms of the business in some places that lower tax rate. For some large companies, a 2% tax saving will give them a major advantage in operation.

On the other side, no one can ignore the disadvantages of multination firms. The multinational’s first concern must be the political environment in that area. An unstable political environment is catastrophic to a multinational firm. According to the article “a corruption scandal at state-run energy giant Petróleo Brasileiro SA, or Petrobras, has the government and banks keeping a close watch on any cash leaving the country.” (Maxwell Murphy &Emuly Chasan) This political scandal result many companies can’t get the money out of Brazil and put them in danger of bankruptcy. The second drawback is economic turmoil. It is obvious that nobody wants to run a business in a country where has a bad economic situation. According to the article, Brazil is facing serious recession. (Maxwell Murphy &Emuly Chasan) This not only make the stock market is bearish, many people are out of work, but also led to decrease value for multinational firms’ investment. For example, depreciation of local currency directly affects the earning in that country, million dollars investment could worth nothing in such an environment. Third issue about multinational companies is tax concern and change in accounting principle. As mention above companies can

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(2018, 11). Advantages and Disadvantage of Going Global. EssaysForStudent.com. Retrieved 11, 2018, from
“Advantages and Disadvantage of Going Global” EssaysForStudent.com. 11 2018. 2018. 11 2018 < "Advantages and Disadvantage of Going Global." EssaysForStudent.com. EssaysForStudent.com, 11 2018. Web. 11 2018. < "Advantages and Disadvantage of Going Global." EssaysForStudent.com. 11, 2018. Accessed 11, 2018. Essay Preview By: Derekhth Submitted: November 26, 2018 Essay Length: 623 Words / 3 Pages Paper type: Essay Views: 209 Report this essay Tweet Related Essays Bureaucracy in Organization: Advantages, Disadvantages The importance of organizations in modern economy and development of new and large organization are facts that make the issues like efficiency and control on 2,058 Words  |  9 Pages Advantages/disadvantages of Rev. War There are advantages and disadvantages in every war that can either be minute details or change the whole course of the war. In the 892 Words  |  4 Pages Data Marts Advantages & Disadvantages Data Marts Advantages The implementation of data marts enable users to gain faster access to common data utilizing a technique called dimensional data modeling, which 494 Words  |  2 Pages Advantages of Globalization People around the world are more connected to each other than ever before. Information and money flow quicker than ever. Products produced in one part 1,972 Words  |  8 Pages Advantages of Globalization Future of JIT If we really look internationally then we can very well judge that behind all MNC’s success there is a just a smart 624 Words  |  3 Pages Similar Topics Advantages Disadvantages Regional Integration Nafta Advantages Disadvantages Watching Tv Advertisements Get Access to 89,000+ Essays and Term Papers Join 209,000+ Other Students High Quality Essays and Documents Sign up © 2008–2020 EssaysForStudent.comFree Essays, Book Reports, Term Papers and Research Papers Essays Sign up Sign in Contact us Site Map Privacy Policy Terms of Service Facebook Twitter

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