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Foundations Of Financial Management
Found in: Page 679
Foundations Of Financial Management

Foundations Of Financial Management

Book edition 16th
Author(s) Stanley B. Block, Geoffrey A. Hirt, Bartley Danielsen
Pages 768 pages
ISBN 9781259277160

Short Answer

What allegations are sometimes made against foreign affiliates of multinational firms and against the multinational firms themselves?

Allegations against affiliated companies include subversion of government, instability in currencies, labor exploitation, and low wages.

The allegation against multinational firms includes labor union charges, technology transfer, and capital to foreign nations.

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Step by Step Solution

Explanation of Multinational Companies

Multinational companies carry out business activities outside the national borders and have invested 30% or more.

Allegations explanations

In the case of foreign affiliates, it destabilizes the foreign country's government and destabilizes the foreign currencies. Less developed countries also allege labor exploitation as lesser wages are offered in these countries by the MNC.

In the case of a multinational firm, the allegations may be related to the transfer of capital and technology to another country, as firms invest in other countries to run their business. Also, another allegation is related to labor union charges, where jobs are exported to other countries, as production facility is set up in another country.

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