When a corporation plateaus in growth, especially where demand
is concerned, they often seek to expand in other countries for that additional
growth. While this is what often makes a corporation a transnational
corporation, it isn't without controversies. The following characteristics are
often associated with a transnational corporation......
1. Transnational corporations may not
be loyal to all of the countries they operate in, and look to maintain
their own interests. In other words, they're mainly concerned about what's best
for them even if it's at the expense of the other country's values or
standards.
2. Transnational corporations avoid
high tariffs involved in importing when they set up in foreign
countries. This allows a corporation to cut costs, but it's not always in the
most honest way.
3. They reduce costs by using foreign
labor at a cheaper price than they would in their home country.
4. They block competition by
acquiring businesses. If they purchase foreign companies, they will not have as
much competition.
5. They may have political
influence over some governments. This means that they may use their
power to convince some governments to support their practices.
6. They can create a loss
of jobs in their home country.
7. They can minimize
taxes. The IRS has to study transnational companies very thoroughly to make
sure they are paying taxes correctly.
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