Main disadvantages or drawbacks of multinational company can be highlighted as follows:
1. Complex Legal Requirements
Multinational companies need to follow complex legal requirements and strict laws of host country. So, it is very difficult to establish and operate business in foreign countries.
2. Loss Of Sovereignty
Multinational companies tries to influence internal politics and they disregard national policy and priorities of the host country. This may negatively impact sovereignty of the host country.
3. Threat To Local Industries
Multinational companies may dominate local industries by increasing unfair competition and by establishing monopoly in the local market of host country.
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4. Transfer Of Capital
These companies bring large amount of money to the host country. It may create negative impact in the economy of home country.
5. Labor Exploitation
Multinational companies offer low wages to the employees of host countries in order to increase profit. So, exploitation of labor is a major drawback of these companies.
