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Business > 4.4 > Flashcards

4.4 Flashcards

1
Q

Why are impacts of MNC’s?

A
  • increases an economys GDP
  • dilutes the culture
  • improves the skill of workers
  • negative environmental impact
  • low wages
  • improves infrastructure and communication
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2
Q

What is an MNC?

A

a multinational company, a business which operates in more than one country

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3
Q

What are advantages of MNC’s on a local economy?

A
  • creates employment
  • increases skills base
  • increases standard of living
  • raises a countrys profile
  • improves balance of payments
  • improves infrastructure
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4
Q

what are disadvantages of MNC’s on a local economy?

A
  • profit leakage
  • low paid jobs
  • pull out quickly
  • poor safety records
  • increases urbanisation
  • widens poverty gap
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5
Q

What are the impacts of MNC and FDI flows?

A

-tends to be a significant investment
-governments will incentivise businesses to move there by giving granta or tax breaks
this lowers the costs of production which increases profit incentive

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6
Q

What do MNC and FDI flows depend on?

A
  • size of the incentive

- the risk of moving (assessment of a country as a production location or market)

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7
Q

What impact does MNC’s have on the balance of payments?

A

the MNC brings capital to the country whilst also bring export promotion and import substitution

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8
Q

What impact does MNC’s have on technology and skills transfer?

A
  • Mnc’s bring efficient production methods that can be learned
  • workers can be trained by MNC’s and then can share the ideas with domestic firms so they are able to see the benefits of new technology and productive systems.
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9
Q

What impact does MNC’s have on consumers?

A
  • local population gains more choice

- benefit from low prices as there may be more substitutes or they dont have to pay an import tariff

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10
Q

what im pact does MNC’s have on business culture?

A

-large numbers of foreign businesses can dilute the culture, customs of traditions within an area.

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11
Q

What impact does MNC’s have on tax revenue and trasfer pricing?

A
  • developing countries are not gaining the full tax revenue due to profit leakages
  • developing countries may lower their taxes to attract businesses
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12
Q

What is ethics?

A

having moral priciples that govern how a company does business.

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13
Q

what do owners want as stakeholders?

A
  • high profits mean they can give good dividends to shareholders
  • enhances job security if theys are able to please the board
  • likely to see employees as a cost depending on the business objectives
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14
Q

what do customers want as stakeholders?

A
  • low prices and high quality
  • ethical products
  • this increases costs which reduces the profits for a business, meaning there is a stakeholder conflict
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15
Q

what do managers want as stakeholders?

A
  • promotion and prospect

- bonuses on high profits

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16
Q

what do employees want as stakholders?

A
  • job security
  • good working conditions
  • fair pay
17
Q

what do the government want as stakeholders?

A

-want tax revenue from corporation tax
however this hits into business profits
-lawful and ethical practices

18
Q

what do suppliers want as stakeholders?

A

-charge high prices while keeping costs of production low

19
Q

what are the effcts of MNC’s on pay and working conditions?

A
  • pay and cost of living varies across the world
  • MNC’s exploit local workers as they dont pay fair wages that locals can live off
  • this is beneficial for owners who want low cost high profit-not for employees
  • working conditions in poorer nations tend to be below developed economies
  • owners wanting high profits may cut costs in health and safety training and procedures
20
Q

What are the effects of MNC’s on emissions?

A
  • the 21st century climate crisis is mainly from 90 businesses
  • create massive emissions from producing products
21
Q

what are the effects of MNC’s on waste disposal?

A
  • MNC’s regularly ignore the weak environmental laws in developing countries
  • waste disposal can be expensive and owners want to lower costs
22
Q

what is a supply chain?

A

a system of businesses, people, activities, information and resources involved in moving a product or sevice from supplier to consumer.

23
Q

what can be problems with supply chains?

A
  • having a part of the supply chain in a developing country can be a problem for MNC’s
  • this is because may garment factories outsource to slums, refugee camps and unlicencses back street businesses
  • forced labour
  • child labour
24
Q

what is forced labour?

A
  • threats or actual physical harm to the worker
  • restriction of movement or confinement to the workplace
  • withholding wages or excessive wage reductions
  • retention of identity documents
25
Q

what is child labour?

A
  • trapped in forms of slavery in armed conflict, forced laboir and debt bondage
  • in some cases children recieve no payment, just food and somewhere to sleep
26
Q

what are marketing considerations of ethics?

A

-product and promotion
business may create products or slogals that are misleading to consumers
however this is not illegal

27
Q

what are positives of political influence?

A

MNC’s want to keep governments happy so they do not put stringent laws in place so trade can be easy as possible

28
Q

what are negatives of political influence?

A

-politicians can be bribed

this is particularly prominent in developing countries

29
Q

what are positives of legal factors?

A
  • standardised for all firms in the country

- this can be passed almost immediately

30
Q

what are negatives of legal factors?

A
  • MNC’s dont always follow the law
  • they can afford to pay the fines
  • they have the best legal teams to defend them
31
Q

what are advantages of pressure groups?

A

-get alot of media attention
this raises public awareness of what the business is doing wrong
-highly organised so can convince customers to boycott

32
Q

what are disadvantages of pressure groups?

A

-MNC’s are big in size so they can crush the pressure group with legal battles

33
Q

what do pressure groups depend on?

A

the size of effectiveness of the pressure group

34
Q

what are advantages of social media?

A

-raises massive awareness to customers

this is the only stakeholders MNC’s dont want to find out

35
Q

what are disadvantages of social media?

A
  • it xan be a short term impact

- MNC’s have the top influences marketing their products to spin bad publicity into good

36
Q

what does social media depend on?

A

the size of the trend can vary massively

Business (4 decks)

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