6/10/22

Question 1

Positive effects of globalisation on MNC’s

Answer 1

• A larger market will allow for increased sales and economies of sale
• closer to a source of raw materials, cutting down transport costs
• New management techniques can be discovered & passed down the organisation
• Low cost of transportation allows the organisation to transport product all over the world
• The business can benefit from learning different cultures

Question 2

Negative effects of globalisation on MNC’s

Answer 2

• Cultural difficulties may lead to conflicts & misunderstandings
• Preferences are not universal so standardised products may not be feasible e.g. Tesco in China sell live 🐢
• increased competition when new MNC’s enter countries, it can damage small businesses
• Consumers may become more aware of tax avoidance methods and can pressure businesses
• Employees may have to work in politically unstable countries, potentially putting them at risk