EQ1

Question 1

define TNC

Answer 1

TransNational Corporation

businesses that work in multiple countries as both makers and sellers of goods and services

Question 2

define GDP

Answer 2

gross domestic product
a measure of the financial value of goods and services produced within a territory

Question 3

define emerging economies

Answer 3

countries that have began to experience high rates of economic growth usually due to rapid factory expansion and industrialisation e.g BRIC group

Question 4

who views globalisation as a positive thing

Answer 4

Hyper-globalisers
who celebrate the way cultures are mixing and places are becoming more diverse

Question 5

what are the 5 global flows

Answer 5

capital, tourism, information, migrants and commodities

Question 6

how is capital a global flow

Answer 6

People move money through he stock markets to create profit

how the stock market works:
A range of businesses, including investment banks and pension funds buy sell money in different currencies to make profit

Question 7

how is commodities a global flow

Answer 7

Valuable raw materials such as fossil fuels, food, minerals traded between nations
Fuelled by low production costs in countries such as China

Question 8

how is information a global flow

Answer 8

The internet has brought real-time communication between nations
Made possible by social media and the internet
Allows for goods + services to be brought instantly

Question 9

how is tourism a global flow

Answer 9

Most tourists travel via plane

Budget airlines have brought a pleasure periphery of distant places

Question 10

how are migrants a global flow

Answer 10

Remittances - money that migrants send home to their families via formal or informal channels

Interdependence - if two places become over reliant on financial/political connections with one another, they’ve become interdependent

Most governments have a pick and choose attitude to global flows, embracing trade flows but migrants will not always be embraced in the same way

Question 11

define Spatial division of labour

Answer 11

the practice of TNCs moving low skilled workers abroad to places where the labour costs are low important skilled management jobs stay at the TNCs headquarters in its country of origin

Question 12

what are intermodal containers

Answer 12

large capacity storage units which can be transported long distances

Question 13

define shrinking world

Answer 13

distant places start to feel closer and take less time to reach because of technology

Question 14

Why is trade and transport important for TNCs?

Answer 14

Transport is becoming more efficient, trade will become better as trade can reach new markets at a faster rate. Trade can expand its spatial division in labour to cheaper places of production such as China and still have fast delivery due to efficient transport.

Question 15

explain time space compression

Answer 15

Increased connectivity changes our perception of time, distance and potential barriers to the migration of people, goods, monet and information

Question 16

what are the 4 types of globalisation

Answer 16

economic globalisation
political globalisation
social globalisation
cultural globalisation

Question 17

explain economic globalisation in terms of TNCs

Answer 17

the growth of TNCs accelerates cross border exchanges of raw material components, finished manufactured goods, shares and purchasing

Question 18

explain political globalisation in terms of TNCs

Answer 18

The growth of trading bloc (EU, BRIC, NAFTA) allows for TNCs to merge, allowing for reduced trade restrictions and tariffs help market growth

Question 19

explain social globalisation

Answer 19

-International immigration has created extensive family networks that cross national borders

-Global improvements in education and health, rising life expectancy and literacy level however these changes are not universal/uniform

-Social interconnectivity has grown due to the use of technology

Question 20

explain cultural globalisation

Answer 20

-The process through which the values, ideas, and experiences of a specific culture are spread across the world.

Western cultural traits come to dominate in some territories (americanisation and mcdonaldization)

-Old cultures merge and meld with globalisation influences

Question 21

what are the different type of technologies used to influence globalisation

Answer 21

Telegraph and telephone
broadband and fibre optics
GPS and GIS
Social media

Question 22

define FDI

Answer 22

a financial injection made by TNC into a nation’s economy

Question 23

define BRICS group

Answer 23

the five fastest growing economies: brazil, russia, india, china and south africa

Question 24

define protectionism

Answer 24

the practise of shielding a country’s domestic industries from foreign competition by taking imports

Question 25

what do international organisations such as IMF WTO and TWB aim to promote

Answer 25

IMF, WTO, the world bank promote free trade policies and foreign direct investment

Question 26

define sovereign wealth funds

Answer 26

government-owned investment funds and banks typically associated with china and countries that have a lot of oil like qatar

Question 27

define trade blocs

Answer 27

Voluntary international organisations that exist for trading purposes, bringing greater economic strength and security to the nations that join.

Question 28

define tariffs

Answer 28

the taxes that are paid when importing or exporting goods and services between countries

Question 29

the 3 main government policies

Answer 29

Free-market liberalisation Privatisation Encouraging business start ups

Question 30

what does free-market liberalisation do

Answer 30

It involves removing price controls, breaking up monopolies and encouraging competition, which increases efficiency further and promotes globalisation

Question 31

positives of privatisation of firms

Answer 31

It may increase efficiency as the profit motive minimises loss (government reluctant to sack workers, leading to higher labour costs) Permitting foreign ownership allows an injection of foreign capital through FDI, introduces new technologies and promotes globalisation

Question 32

what is privatisation

Answer 32

in the 1980s many governments have sold industries once owned by them (nationalised industries) to private businesses

Question 33

how do governments encourage business start ups

Answer 33

There could be low business taxes, well-enforced contract laws, minimum regulation and efficient bankruptcy procedures, which encourage new firm creation

Question 34

positive of encouraging business start ups

Answer 34

Creating motivation and competition in the economy

Question 35

How can governments joining a trading bloc also encourage globalisation

Answer 35

They promote free trade between members, increasing economic globalisation.

Question 36

advantages of governments joining trade blocs

Answer 36

markets grow as there are no longer barriers increasing demand and supply of products increasing consumption and employment Companies that have a comparative advantages in products or services should also do really well e.g french wine makers as france is known for its vineyards increasing the products desirability compared to UKs vineyards wine

Question 37

what are the 4 sectors of the AT Kearney

Answer 37

political engagement technological connectivity personal contact economic integration

Question 38

what is a special economic zone

Answer 38

SEZ An industrial area, where conditions are made to help attract FDI. usually through government subsidies like low tax rates and no tariffs on imports and exports

Question 39

what are government subsidies

Answer 39

a benefit given by the government to groups and individuals usually in the form of a cash payment or a tax reduction

Question 40

what are the 4 types of FDI

Answer 40

offshoring foreign merges foreign acquisition transfer pricing

Question 42

what is foreign merges

Answer 42

2 firms in different countries join forces to create a single entity

Question 43

what is foreign acquisition

Answer 43

when a TNC launches a takeover of a company in another country

Question 44

what is transfer pricing

Answer 44

some TNCs, sometimes has channelled profits through a subsidiary company in a low tax country

Question 45

example of offshoring and how it occured hint: asian country

Answer 45

indonesia Opens market to America and Europes TNCs – GAP, Levis World bank lent money by funding speedy modernisation of roads, power supplies and ports

Question 46

negative of offshoring in Indonesia

Answer 46

However its become a tax haven for sweatshops manufacturers

Question 47

example of foreign mergers hint: asian country

Answer 47

india Globalisation began in 1991 for india Indias. TNCs have grown in their size and influence

Question 48

how has foreign merging occured in India

Answer 48

foreign retailers could only gain a presence of India's own led to mcdonald's restaurants in North India + East India are a joint venture with vikram Bakshi and mcdonalds corporation This has deterred companies such as Ikea but because of the agreement 90% of India's shops are still family owned

Question 49

define offshoring

Answer 49

TNCs move parts of their own production process (factories or offices) to other countries to reduce labour or other costs

Question 50

whats a global production network

Answer 50

a chain of connected suppliers of parts and materials that contribute to the manufacturing or assembly of the consumer goods. e.g The network serves the needs of a TNC such as apple or tesco

Question 51

define outsourcing

Answer 51

TNCs contract another company to produce the goods and services they need rather than do it themselves. This can result in the growth of complex supply chains

Question 52

how have some areas of the world benefitted more from FDI from TNCs than others

Answer 52

-Not all places have enough market potential to attract large retailers – low income/culture -Not every country has the same amount of raw materials as others -Not every country has the factors of production (land, labour, capital and enterprise) to produce the TNCs goods and services

Question 53

define glocalisation

Answer 53

changing the design of products to meet local tastes or laws. It is an increasingly common strategy used by TNCs in an attempt to conquer new markets

Question 54

do all companies need to glocalise

Answer 54

Yes, as if a company wants to make sales and profit there has to be demand for the goods and services which if a product such as mcdonalds cannot be consumed due to cultural beliefs will perform basket unless glocalisation takes place to cater towards their needs however, a company like lego wouldn't need to glocalise as their products cater to everyone with genuine global appeal