7.4b World Trade Organisation - TNC

Question 1

What is a TNC

Answer 1

Large businesses that operate in a number of countries

Question 2

Influence of TNC on globalisation

Answer 2

The top 200 TNCs employ 1% of global workforce but account for up to 80% of world’s economic activity in 2013

Question 3

Three ways TNCs maximise profits

Answer 3

Outsourcing

Economies of Scale

Owning every stage of production (no capital lost) - vertical integration

Question 4

TNC example

Answer 4

Walmart

• Rank 1 in 2015
• Origin in USA

Question 5

Two types of TNCs

Answer 5

Public and State owned

Question 6

Public TNC

Answer 6

Have shareholders who receive dividends based on profits each year – profit drives everything

Question 7

Private TNC

Answer 7

State led and operate commercially but all profits are returned to the state

e.g Gazprom in Russia control most of the world’s oil
supplies

Question 8

Trend of TNC growth

Answer 8

At least 46% per decade

Question 9

Why trend of TNC growth

Answer 9

Global shift in manufacturing to Asia by TNCs. Since the 1990s the shift has led to rapid increases in exports from developing countries