PUBLIC CORPORATIONS

advantages of being a multinational company to the firm.

- multinationals are able to sell far more than any other type of company. - multinational companies can avoid transport cost. - multinationals can take advantage of different wage levels in different countries. - multinationals can achieve great economies of scale. - multinationals have less chance of getting bankrupt than smaller companies. - multinationals can carry out a lot of research and development.

disadvantages of public corporations.

1) they can be difficult to control and manage: due to large size, time has to be spent on meetings and communicating with staff, slowing down decision making. 2) they can become more inefficient, produce low quality products, and charge relatively high prices, due to lack of competition, and the knowledge that they cant go bankrupt. 3) they have to be subsidized if they are loss making, the use of tax revenue to support them has an opportunity cost- it could be spend on provision of facilities for the people.

advantages of public corporations

1) they can be used to influence economic activity. to boost the country's output, public corporations can be directly encouraged to increase their output. 2) in cases, where it is practical to have only one firm in the industry, a public corporation would not abuse its market power. 3) ownership of a whole industry by the government makes planning and coordination easier. 4) it also ensures that basic industries such as electricity and transport services, charge low prices and produce good quality, as other domestic industries depend on them.

features of public corporation.

1. the chairman and board of directors are appointed by government. 2. the chairman and board of directors are responsible for the day to day management but are accountable to the government. 3. there are no shareholders. 4. the funds come from the government, from government approved loans and from the private sector. 5. public corporations do not seek to make profit. 6. their aim is to work in the public interest.

what are multinational companies?

a multinational company or corporation is a firm that operates in more than one country with its headquarters in a particular country.

What is a public corporation?

a public sector business, owned and controlled by the government.

what kind of business organisations are MNC's ? give examples.

most of these firms are public limited companies. ex: US based macdonalds, UK based lloyds, TSB bank, and Japanese bases toyota.