Business Ethics and Corporate Governance, Second Edition

DISADVANTAGES OF MNCs TO THE HOST COUNTRY

• Loss of national sovereignty, as the host nation cannot control what an MNC does in other nations, which may be inimical to its interest.
• Political interests of MNCs may mirror the political interest of their respective home nations, and this may be detrimental to the host nation. For instance, an American MNC may serve the interest of America, while operating in India.
• The host nation may lose control over its own economy.
• Negative impact on the host’s balance of payments because of heavy imports of spares and components.
• Exploitation of the hosts’ irreplenishable natural resources leading to the dwindling of these.
• Exploitation of labour of the host when the country needs it.
• Indulgence in harmful ...