Canlas, Don Hanz William D.

Pros and Cons of Transnational or Multi-National Businesses (TNCs/MNCs) and

the Integration of the Philippines to the Global Economy

Globalization brought about enormous developments that increased

interconnectedness throughout the world. This is obvious from the growth in global trade
and the exchange of commodities and services. Accordingly, several transnational or
multinational corporations were created and proliferated, having significant effects on the
world economy. Organizations of this type have several resources, locations, and
relationships in the various nations where they conduct business. They brought to
changes in the marketplace for trading as well as advantages and disadvantages for
individuals, businesses, and the economy.

Multinational organizations offer advantages in some areas due to their extensive

resources, infrastructure, and workforce. The first advantage is that production costs can
be decreased, which means that MNCs can do so by establishing production facilities in
a variety of nations. They gain advantages from more production and can develop their
brand. Next is good quality products, which implies that organizations have access to
high-quality raw materials thanks to global manufacturing access, which enables them to
produce goods of a high caliber. The reputation of a brand is enhanced through great
items both locally and internationally. The next point is that the economy is expanding
rapidly, and MNCs pay their employees more than other local businesses do, drawing in
a larger global labor market. MNCs contribute local taxes that are also beneficial to the
nation's economic growth. Next is even more employment, which implies that MNCs give
local workers opportunities because they are familiar with the local culture and can help
produce goods that respond to the demands of the community. As a result, local workers
are hired more frequently, which helps businesses expand. Finally, as local workers assist
them in providing a deeper grasp of local equipment with the assistance of other corporate
employees, new ideas, which means more items that are useful are produced.

However, while these organizations use advantages, they also have

disadvantages of their own. Due to their dominance in the local market, small firms find it
more difficult to prosper. Furthermore, large global corporations can eliminate regional
enterprises in emerging nations by taking advantage of their economies of scale. The first
disadvantage is laborer exploitation, which happens when a multinational corporation
provides locals with all the resources, they need to learn a profession, and then the
business starts making more money from the locals while the laborer receives no
compensation and struggles with poor wages. Next is to control the dominance of the
nation, which entails MNCs gradually accumulating assets there and subtly dominating
the nation's freedom. They support the community by paying taxes and providing jobs,
therefore occasionally the government also suffers. Additionally, there is an increase in
pollution since more manufacturing is taking place as a result of international corporations
using local raw materials to their advantage. Exploitation of natural resources is done to
obtain the raw materials. The next step is to import skilled workers, who typically produce
superior products. Multinational businesses occasionally educate local workers, but to
obtain results quickly, they also hire skilled workers from other countries, which has an
impact on the economic development of the host nation. The local employees also run
the risk of losing their work because MNCs can do it for their own gain. Finally, it creates
legal monopolies because the government views each site as a separate business, even
though international corporations' assets are governed by a centralized organization.
MNCs are allowed to conduct their business as they see fit, however certain businesses
are on the edge of becoming monopolies.

Globalization, therefore, has been incredibly helpful for the Philippines' inclusion
into the world economy. With the growth of MNCs or TNCs in the country, there have
been changes such as an increase in labor and the introduction of new enterprises to
support the economy, which has increased the country's globalization. Overall, the most
significant figure in the preceding chapters is now a multinational corporation.
Multinational corporations defined as organization that sell their products or services in
more than one country, are increasingly common today, and most of these organizations
are based in industrialized country.