G - TNC's Flashcards
1
Q
What does TNC stand for?
A
Transnational corporations
2
Q
What are TNC’s?
A
- Large, wealthy organisations
- Headquarters in one country (usually richer areas) and branches spread across the world
3
Q
Why would production occur in poorer areas?
A
- Labour costs are lower
- Laws are more lenient
4
Q
Why would production occur in richer areas?
A
There are usually skilled workers
5
Q
What are advantages of TNC’s?
A
- Provide jobs in factories making supplies or where products are sold
- Multiplier effect
- Workers are trained leading to the development of skills
- Infrastructure and communications improve
6
Q
What is the multiplier effect?
A
Where initial investment and jobs lead to knock-on-effect, creating more jobs and providing money to generate services.
7
Q
What are disadvantages of TNC’s?
A
- Leakage
- Wages are low
- Key jobs go to outsiders
- The branch could be closed if there are problems worldwide or in the company
- Working conditions can be poor
- Labour force is expected to work long hours
- Health and safety and pollution can become a problem
8
Q
What is leakage?
A
Where profits made by the company are taken out of the country to the country of origin and so do not benefit the host country
