Global Governance - (Walmart - TNC 💸)

Question 1

What is a Transnational Corporation (TNC)?

Answer 1

A TNC is a large business organisation that operates in multiple countries, with a headquarters in one country and operations in others.

Question 2

What is Walmart?

Answer 2

Walmart is an American multinational retail corporation, the world’s largest company by revenue (approx. $611 billion in 2022), known for its chain of hypermarkets, discount stores, and grocery stores.

Question 3

How is Walmart spatially organised?

Answer 3

Walmart is headquartered in Bentonville, Arkansas, USA, but operates in 24 countries with over 10,500 stores, using a decentralised model with regional managers to adapt to local markets.

Question 4

Name three countries where Walmart operates internationally.

Answer 4

Walmart operates in Mexico (as Walmart de México), Chile, and China, among others.

Question 5

How does Walmart organise its production and sourcing?

Answer 5

Walmart does not manufacture goods but sources products from global suppliers, often from low-cost economies such as China, Bangladesh, and India, to keep prices low.

Question 6

What strategy does Walmart use to manage its supply chain efficiently?

Answer 6

Walmart uses “Just In Time” (JIT) delivery systems and advanced data analytics to track inventory, reduce storage costs, and replenish stock efficiently.

Question 7

What types of linkages does Walmart have?

Answer 7

Walmart forms backward linkages with global suppliers and forward linkages through store distribution networks, plus strategic partnerships with logistics and tech companies (e.g., Microsoft, Flipkart in India).

Question 8

What are Walmart’s main trading patterns?

Answer 8

Walmart trades primarily in consumer goods, with most products sourced from Asia and sold across the Americas and other international markets.

Question 9

How does Walmart market itself globally?

Answer 9

Walmart uses the slogan “Save Money. Live Better” and tailors marketing to local cultures—e.g., in Mexico it promotes family-friendly messaging, while in China it emphasises product safety.

Question 10

How has Walmart impacted the economy of Mexico?

Answer 10

Walmart is Mexico’s largest private employer with over 200,000 staff, boosting employment and FDI. However, it has been criticised for harming small local businesses due to undercutting prices.

Question 11

What is one negative social impact of Walmart’s operations in developing countries?

Answer 11

Accusations of poor working conditions, low wages, and limited union representation in supplier factories—especially in Asia—highlight exploitation concerns.

Question 12

How has Walmart affected the USA as its home country?

Answer 12

It has contributed to lower consumer prices and job creation but also to the decline of small retailers and the outsourcing of manufacturing jobs.

Question 13

What environmental criticisms has Walmart faced?

Answer 13

Walmart has been criticised for high carbon emissions from global logistics, large land use for stores, and over-reliance on non-renewable packaging.

Question 14

What environmental initiatives has Walmart implemented?

Answer 14

Walmart aims to be powered 100% by renewable energy and reduce emissions by 1 billion metric tons through its Project Gigaton initiative.

Question 15

Walmart is a chain of department stores, what does it own in the UK?

Answer 15

ASDA.

Question 16

What retail companies has Walmart acquired?

Answer 16

Seiyu in Japan, ASDA in the UK and Bompreco in Brasil.

Question 17

How does Walmart affect job creation in the USA?

Answer 17

Each new store creates jobs. For example, an expanded store in Milpitas, California opened in 2015, creating 80 new jobs.

Question 18

How does Walmart affect prices for consumers in the USA?

Answer 18

Walmart is one of the cheapest supermarkets in the USA, offering low-cost goods and making shopping more affordable for many.

Question 19

What impact does Walmart have on US manufacturing?

Answer 19

Walmart buys many goods from foreign suppliers, contributing to the decline of the US manufacturing industry and the loss of domestic jobs.

Question 20

What is the impact of Walmart on small local businesses?

Answer 20

Smaller local shops often close because they can’t match Walmart’s low prices, leading to job losses and reduced local entrepreneurship.

Question 21

How does Walmart affect consumer experience in the USA?

Answer 21

Walmart provides a wide choice of goods (e.g., food, clothing, garden furniture) and many stores are open 24/7, allowing flexible shopping.

Question 22

What are criticisms of Walmart’s employment practices in the USA?

Answer 22

Many jobs are poorly paid with few benefits (like healthcare), leading some employees to rely on state welfare. Working conditions include long, irregular hours.

Question 23

What is Walmart’s environmental footprint in the USA?

Answer 23

Walmart produces significant pollution and stores are often large and out-of-town, leading to land use and car pollution. However, Walmart has opened ‘green stores’ powered by renewable energy.

Question 24

What kind of jobs does Walmart offer in host countries?

Answer 24

Walmart offers skilled local management jobs in developing countries (e.g., in China) and provides a more stable income in poorer regions.

Question 25

How has Walmart contributed to social good abroad?

Answer 25

Walmart donated over $2 million in 2015 to communities in West Africa affected by natural disasters, supporting health and environmental initiatives.

Question 26

What are the working condition concerns in host countries?

Answer 26

Walmart and its suppliers have been criticised for long hours and poor working conditions in some developing countries.

Question 27

How does Walmart support local economies abroad?

Answer 27

Walmart creates jobs in construction, manufacturing, and retail. It also buys from local farmers and businesses, like over 6000 suppliers in Canada.

Question 28

What are the negative economic impacts of Walmart in host countries?

Answer 28

Walmart pressures suppliers to accept low prices and causes local small businesses to shut down due to unmatchable low prices. Most profits are sent back to the USA rather than reinvested locally.

Question 29

What are the environmental criticisms of Walmart in host countries?

Answer 29

Walmart uses large land areas for stores and contributes to pollution. However, it also invests in environmentally friendly technologies and sustainable development.

Question 30

How does Walmart create unequal flows of money?

Answer 30

Profit Repatriation: Most profits made in Walmart’s host countries (like Mexico, Chile, or China) are sent back to the USA, rather than being reinvested locally. Low Supplier Payments: Walmart exerts pressure on local suppliers to sell goods at extremely low prices, reducing their profit margins and creating economic dependence. Wage Inequality: Employees in developing countries (e.g. factory workers in Bangladesh or retail staff in Mexico) are paid much less than their American counterparts, often receiving low and unstable wages. Limited Local Investment: Small, local businesses are often outcompeted and shut down, reducing the flow of capital within local economies.

Question 31

How does Walmart create unequal flows of people?

Answer 31

Limited Upward Mobility: In both developed and developing countries, many Walmart workers are stuck in low-paid, low-skill roles with little chance of promotion. Exploitation of Labour in LICs: Walmart's suppliers in countries like Bangladesh or China often rely on long working hours, with poor conditions, reducing the freedom and agency of workers. Lack of International Labour Movement: Although Walmart operates globally, there is little movement of workers across borders — skilled managerial jobs stay mostly in the USA or are given to elite locals. Job Loss in Developed Countries: Manufacturing jobs in the USA have declined as Walmart outsources production to cheaper labour markets abroad, contributing to domestic unemployment in some sectors.