Multinationals

Multinationals

Multinationals are large conglomerates of business, which operate in many countries.

The ownership, however, is usually based in one country.

The parent company of a multinational may operate as a holding company, which has subsidiaries in other countries.

Multinationals aim to expand their operations in the most profitable areas, and to gain as large a share as possible of the world market.

The manufacturing of products usually takes place in developing countries where the costs of labour and raw materials are cheaper.

In doing this, multinationals invest funds and experience in developing countries.

They often provide training schemes in order to improve the skills of the local work-force and introduce new technology.

However, this practice isn't very beneficial to the developing country, as any profits are taken back to the "home" country of the multinational.

Most multinationals are public companies, but there are a few large private companies.

Some giant public companies have manufacturing and sales outlets in many countries.

Because of their size and because they employ so many people, they can control and change prices and sometimes influence governments' economic politicise.