Gap Case
Assignment Questions:
1. How can multinational companies (MNCs) such Gap and Levi Strauss have positive and negative effects on the host countries in which they operate? List the possible associated benefits and concerns of their presence. (5 Marks)
Chapter 4 and 5:
A multinational company or corporation (MNC) is an organization that has business operations in different countries. MNCs get involved in global activities to take advantage of business opportunities in several geographic areas and to gain competitive advantage.
Going multinational with a business has a number of consequences, both positive and negative. There are crucial factors that benefit yet concern the association with the presence of many MNCs in a host city, such as Gap and Levi Strauss.
It is essential for a multinational company to operate within current economic, social, and legal forces of a host country, as well as those of its home country, or it may limit or deny its right to conduct business. The Government is also a factor to multinational companies going abroad. For instincts, specific actions by governments can directly encourage and promote international business through a number of techniques such as; establishing free-trade zones, gaining most-favoured nation status, establishing free-trade agreements and common markets.
Presence of MNCs can have many benefits for the host country such as increased employment, availability of products and services, and even improved infrastructure. To elaborate more on the advantages of multinational operations, the most well-known advantage is the ability to tap into low-cost labor markets, which represents one method of cutting production costs. Raw material resources may also be cheaper to extract. Ethical concerns are one of the biggest drawbacks to conducting multinational business. However, major concerns about MNCs are that their economic power can make their host countries dependent. When this occurs, MNCs could start to influence and
1. How can multinational companies (MNCs) such Gap and Levi Strauss have positive and negative effects on the host countries in which they operate? List the possible associated benefits and concerns of their presence. (5 Marks)
Chapter 4 and 5:
A multinational company or corporation (MNC) is an organization that has business operations in different countries. MNCs get involved in global activities to take advantage of business opportunities in several geographic areas and to gain competitive advantage.
Going multinational with a business has a number of consequences, both positive and negative. There are crucial factors that benefit yet concern the association with the presence of many MNCs in a host city, such as Gap and Levi Strauss.
It is essential for a multinational company to operate within current economic, social, and legal forces of a host country, as well as those of its home country, or it may limit or deny its right to conduct business. The Government is also a factor to multinational companies going abroad. For instincts, specific actions by governments can directly encourage and promote international business through a number of techniques such as; establishing free-trade zones, gaining most-favoured nation status, establishing free-trade agreements and common markets.
Presence of MNCs can have many benefits for the host country such as increased employment, availability of products and services, and even improved infrastructure. To elaborate more on the advantages of multinational operations, the most well-known advantage is the ability to tap into low-cost labor markets, which represents one method of cutting production costs. Raw material resources may also be cheaper to extract. Ethical concerns are one of the biggest drawbacks to conducting multinational business. However, major concerns about MNCs are that their economic power can make their host countries dependent. When this occurs, MNCs could start to influence and