Impacts of TNCS on Host Economy Essay Example | Topics and Well Written Essays - 1500 words

Impacts of TNCS on Host Economy - Essay ExampleThe current invention of trans-border origin operations began to intensify after the Second World War, even though such business operations have been in existence for some centuries (Ietto-Gillies, 2012, p.7). The wide coverage of these organizations cutting across cultures take away them have positive and negative impacts on, and become a point of concern for, their employees, the competitors, the stateal customers, the host government, alongside the other international organizations that may operate in the country (Sat, 2009, p.41 Fuller, n.d). The effects realized will be determined by the nature of operations by the TNCs. This paper focuses on the economic impacts that the foreign cypher investments established by the transnational corporations have on the economy of the host nations. It examines how the workers, the suppliers, the interior(prenominal) competing organizations, and the host communities ar affected by the oper ations of a transnational corporation within a given country. event attention is given to the effect that acquisition of Cadbury by Kraft had on the economy of the United Kingdom. The controlling Contributions of TNCs to the Host Countrys Economy The operations of transnational corporations have certain positive impacts on the economy of the host nations. One of the benefits of TNC is lurch of technology into the host economy (Berger & Diez, 2008). The transnational corporations often bring in into a given country through different entry modes such as exporting, joystick ventures with the domestic firms, foreign direct investments, or licensing among many others (Rugman, 1996, p.29). They develop various linkages that form the basis for technology spillover (Berger & Diez, 2008). The local anesthetic employees will get to learn the modern technologies that the TNCs apply in their production operations. The learnt technologies can than be transferred to the domestic companies wh en these employees move on to take employments with the domestic firms. In this way, the technology shall have been transferred into the economy of the host nation at a relatively lower cost than other methods of acquisition such as purchase the technology from the developers or domestic development of the technology. Similarly, the transnational corporations can acquire or enter into joint ventures with domestic firms. The transnational corporations have better responses to organizational changes. The organizations work in different cultural, institutional, and regulatory environments and they are forced to modify their organizational structures continuously (Lowe & Wrigley, 2010, p.382). The management approaches may be copied by local managers (Berger & Diez, 2008, p.1049) who would transfer the techniques to the management of other organizations if their tenure with the TNC comes to a halt. A manager who has worked for a significantly long current for some TNC may develop new ideas (owing to the research and development carried out by the TNCs) to go forrader and establish his or her new investment scheme. The transnational corporations producing goods locally may help reduce the imports to a given country if the domestic customers are attracted to their products in preference to the alternative imports (Fuller, n.d). The goods made locally by the TNCs are likely to be cheaper since other costs like shipment and duties have been reduced considerably. On a similar perspective, the TNCs can help increase the export from a given economy if the TNC exports