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2.3 Global Governance > 2.4 Nature and role of TNC's > Flashcards

2.4 Nature and role of TNC's Flashcards

1
Q

What is a TNC

A

Trans national corporation operating in at least 2 countries

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2
Q

Why do TNC’s operate in multiple countries

A

Escape trade tariffs
Reach foreign markets
Low production costs
Exploit natural resources

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3
Q

What are the characteristics of a TNC

A
  1. Control key suppliers, processing and production
  2. Maximise economies of scale
  3. Have a brand / logo
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4
Q

How are TNC’s spatially organised in terms of headquarters

A

TNC’s locate wherever best benefits them

Headquarters usually in a large home country city. Research done near high education for workforce and facilities

Subsidiary headquarters in each continent

Production in low income countries

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5
Q

What are the 3 types of TNC’s

A

Primary sector (LIC to HIC)
Secondary sector (LIC)
Tertiary/Service (LIC but footloose)

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6
Q

How is the spatial organisation of TNC’s changing

A

Primary sector TNC’s are increasingly working with HIC’s instead of LDE’s due to new technology

For example, Fracking is increasingly occurring in the USA

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7
Q

What is fracking and its disadvantages

A

Water + chemicals pumped underground at high speeds to fracture rock and capture natural gas

Creates tremors, water pollution and harms wildlife

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8
Q

Why do Secondary sector TNCs work in LDE’s

A
  1. Cheap Labour
  2. Good workers ethic
  3. Can Invest in training
  4. Government incentives/ enterprise zones and compete for contracts
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9
Q

Why do tertiary / service sectors work in LDE’s

A

Go wherever has the cheapest labour and best education (language)

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10
Q

What is a very innovative form of spatial organisation for TNC’s

A

Agglomerations

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11
Q

What is an agglomeration

A

When similar industries locate near each other to share ideas and resources

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12
Q

What are the 2 types of agglomerations

A
  1. Urbanisation economy - Benefits that DIFFERENT industries get being together. Brought together to share the market and infrastructure (mall)
  2. Localisation economy - Benefits that the SAME industry receive from being close together like LABOUR POOL and KNOWLEDGE SPILLOVER (Silicon Valley)
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13
Q

How do TNC’s have so much control over the market

A

Through integrating different parts of the business into one so they have the monopoly

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14
Q

What are the 2 types of TNC integration

A

Vertical - when the entire supply chain is owned by the entire company (to create economy of scale)

Horizontal - when a company diversifies its operation (usually when one firm takes over another) Such as Disney with Pixar and ABC

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15
Q

Give an example of a TNC

A

Apple Inc.

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16
Q

Give some context for Apple

A

Opened 1976
Number one global brand
100,000 full time employees
Located in over 16 countries

17
Q

Who is apples biggest market

A

Young , wealthy, educated with growth in the Asia pacific region

18
Q

What is apples spatial organisation like

A

Headquarters Apple Park in California
Products designed in Silicon Valley
Subsidiary headquarters in Cork
Manufacturing by Foxconn China

19
Q

Who are Foxconn

A

“The Silicon Valley of china” with over 400,000 workers, lots of whom live onsite being paid $200 a month

20
Q

Why are apples secondary headquarters in Cork

A

Second lowest EU tax rate

21
Q

What are the positive impacts apple has had on Cork

A

4,000 employees (60% Irish)
Attracted other high tech firms
Attracted highly skilled workforce
Made infrastructural improvements

22
Q

What are the negative impacts apple has had on china

A

Low pay - long hours
Poor health and safety
Child labour
Suicide

23
Q

Give some stats to back up the negative impacts apple has had on china

A

60+ hours week for $100 month
In 2010 50 people were poisoned
In 2010 14 people committed suicide

24
Q

What are some environmental concerns about apple

A
  1. Uses finite resources for electricity
  2. Using toxic chemicals (discharged into rivers)
  3. Not recyclable products
25
Q

What did apple do in response to the environmental concerns

A

“green my apple” campaign switched to 75% renewable energy, and also audit their factories more often

26
Q

What are the advantages and disadvantages of spatial organisation in the TNC home country

A

Cheaper goods
Get jobs in financial services

De-industrialisaiton and structural unemployment

27
Q

What are the advantages and disadvantages of spatial organisation in the TNC outsourced country

A

New jobs, technology and skills
Multiplier effect

Poor working conditions
Exploiting resources + environment
Lots of economic leakages

2.3 Global Governance (13 decks)

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