Drawbacks of MNCs

There are lots of drawbacks of MNCs. All these drawbacks are being written on the basis of past experience of MNCs.

There are lots of drawbacks of MNCs. All these drawbacks are being written on the basis of past experience of MNCs.


1. Interference in the Economic Sovereignty of the Host Country

MNCs affects the independence of any country. For example, one East India company came in India for business but it made India slave for 200 years. So, it is the biggest drawback of MNCs that these are the risky for freedom of any country.

2. Drainage of Resources

MNC's main aim is to earn the profit by any way. So, it exploits developing country's natural resources. These MNCs increase pollution of air and water.

3. Strain on Foreign Exchange Reserves

MNCs are very risky for foreign exchange reserves. India, there are lots of MNCs which transfer Indian currencies to their home country in the form of profit and dividends of foreign shareholders. With this, our foreign exchange reserve level  is decreasing.

4. Minimum Transfer of Technology

No MNC bring any new technology in India. They only produces zero technology products in the form of cold drinks and other which can easily make in each village of India.

5. Exploitation of Labour

These MNCs do not create any employment in the host country because these MNCs are only interested to exploit laborers by paying them less. All top posts are filled by their home countries employees.

6. Cultural Loss

This is the one of biggest drawback of MNCs that it is risky for our cultural loss. Our culture makes us vegetarian but many MNCs employees eat meat and chicken. So, all these things are against our culture. Bad Indians copies MNCs employees and start to wear leather shoes. Due to this, animals of India are being killed . So, this activities are so bad.

7. Creation of Monopolies

MNCs create also monopolies. With high advertising and other ways, these MNCs do not live domestic companies. After this, these MNCs increase prices and then get high profit by exploiting consumers of India.

8. Evasion of Taxes

These MNCs do not disclose its all true account. So, with this, these MNCs save their tax liabilities.

9. Economic Power

This is also one of the important drawback of MNCs that these MNCs misuse of their economic power. With economic power, these MNCs tries to change the economic policies. With this, they have to pay zero tax in host country.

10. Depletion of Natural Resources

After increasing of MNCs in India, you can see that our all natural resources are decreasing very fastly. These MNCS are selling urea fertilizers. With this, our land is becoming useless. 

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Business Education: Drawbacks of MNCs
Drawbacks of MNCs
Business Education
http://business.svtuition.org/2011/11/drawbacks-of-mncs.html
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