Name: Cristel Jane M. Bautista Instructor: Reynaldo Rodriguez Jr.

Section: AE-305 Subject: 4CONWORLD-4367

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

and the Integration of the Philippines to the Global Economy.”

With the significant changes brought by globalization, this world became more interconnected with
each other. This is evident with the increase rate of trading and exchanging of goods and services throughout
the globe. In line with this, various transnational, or multi-national businesses (TNCs/MNCs) are developed
and became popular that delivered profound impacts in the global economy. These types of companies have
many assets, establishments, and connections in different countries where they transact business. They
brought changes in the trading market as well as providing benefits and disadvantages among people,
employers, workers, and the economy.

With wide range of resources, establishments, and workers, multi-national businesses deliver
benefits among certain aspects. They are able to take advantage of economies of scale due to their size and
scope of activities, cutting average expenses and prices for consumers. Furthermore, the substantial
earnings they generate can be used for research and development. Finally, global firms employ a method
known as foreign direct investment. This helps to create capital flows to developing and underdeveloped
countries.

On the other hand, as these types of companies employ advantages, they also have their own
drawbacks. Local small businesses find it harder to thrive due to their market dominance. Furthermore, big
multinational companies can exploit their economies of scale to drive out local businesses in developing
countries. In addition, multinational corporations frequently contribute to pollution and the use of
nonrenewable resources with the benefit of more profit while causing environmental degradation. Finally,
subcontracting to countries with lower labor costs has resulted unemployment in the industrialized nations.

Meanwhile, regarding the integration of the Philippines to the global economy, globalization has
proven extremely beneficial. Since 1995, when the Philippines joined the World Trade Organization to sign
accords, the economy has changed dramatically. With the rise of MNCs or TNCs in the country, there have
been developments in the country, such as more labor and the emergence of new businesses to aid the
economy which made the country more globalized.