What are the negative effects of the operations of multinational companies on local industries?

• Companies are often interested in profit at the expense of the consumer. Multinational companies often have monopoly power which enables them to make excess profit. For example, Shell made profits of £14bn last year
• Their market dominance makes it difficult for local small firms to thrive. For example, it is argued that big supermarkets are squeezing the margins of local corner shops leading to less diversity.
• In developing economies, big multinationals can use their economies of scale to push local firms out of business.
• In the pursuit of profit, multinational companies often contribute to pollution and use of non renewable resources which is putting the environment under threat.
• MNCs have been criticised for using ‘slave labour’ – workers who are paid a pittance by Western standards

What distinguishes these companies the company's capital strength, horizontal and vertical expansion of the company, the assets owned by the size, the level of production quality, marketing studies and research, control over a wide area of global markets, training and qualification of workers. All of these features is the burden cannot be local companies be a competitor in front of this kind of giant-sized companies, and the exploitation of cheap labor in developing countries hand, and access to great facilities at the expense of local businesses from the host country, to control the local markets, for example like these companies , car companies and clothing, which is now manufactured in Mexico, China, Malaysia, Indonesia.

Regards.