Global industries 4.4

Question 1

What is a Multinational corporation (MNC)?

Answer 1

A business that is registered in one country but operations in different countries.

Question 2

What are three impacts of MNCs on a local economy?

Answer 2

-Increased wages above local average
-Job creation
-employable training methods are introduced

Question 3

What are three disadvantages of MNCs on the local economy?

Answer 3

-May exploit workers if employee laws are weak
-Pay relatively low wages
-May relocate workers and not create jobs for the local economy

Question 4

What are two advantages of MNCs on local businesses?

Answer 4

-May improve the local economy
-May be joint venture opportunists with the MNCs

Question 5

What are two disadvantages of MNCs on a local business?

Answer 5

-MNCs can produce for less and become hard competition for local businesses
-Reduce the supply of workers

Question 6

What is one advantage to the local community of MNCs?

Answer 6

MNCs normally invest to improve the infrastructure

Question 7

What is one disadvantage to the local community of MNCs?

Answer 7

May cause damage to the environment in production processes

Question 8

What are three advantages to the national economy if MNCs operate there?

Answer 8

-FDI flows, invest in the economy
-Technology and skills transfer
-Balance of payments

Question 9

What positive impact do MNCs have on balance of payments?

Answer 9

Can improve balance of payments as exports will be higher

Question 10

What negative impact do MNCs have on balance of payments?

Answer 10

The MNC may buy raw materials from abroad which increases a countries outflows

Question 11

What is balance of payments?

Answer 11

A statement showing all of the financial transactions between a country and the rest of the world

Question 12

What is the positive impact of MNCs on business culture?

Answer 12

Domestic businesses may influenced by MNCs and it may promote entrepreneurship

Question 13

What is the negative impact of MNCs on business culture?

Answer 13

MNCs may promote unethical business practices

Question 14

What is impact on a business of unethical practices?

Answer 14

-Can damage the brand
-Pressure to become ethical

Question 15

What are the four ethical considerations for businesses?

Answer 15

-Stakeholder conflicts
-Environmental
-Supply chain
-Marketing

Question 16

What might a management V worker conflict entail?

Answer 16

Management may be more focused on output or reducing costs than worker safety
Workers want a safe and comfortable environment

Question 17

What might a management V owner conflict entail?

Answer 17

Owners want managers to maximise profits and don’t focus on employee hapiness
Managers may Sacrifice some profit to make sure employees are comfortable

Question 18

What unethical pay and working conditions do some MNCs do?

Answer 18

-Child labour
-Low wages
-Cramped working conditions

Question 19

What are two environmental issues that MNCs may do?

Answer 19

-Poor waste management due to MNCs wanting to cut costs
-Lots of emissions which could lead to health issues for the local community

Question 20

What are two supply chain considerations for MNCs?

Answer 20

-Child labour
-Exploitation of labour (low wages poor conditions)

Question 21

What are two marketing considerations for MNCs?

Answer 21

-Misleading product labelling (false information)
-Inappropriate promotion

Question 22

What are four ways to control MNCs?

Answer 22

-Legal control
-Social media
-Pressure groups
-Political influence

Question 23

What are pressure groups?

Answer 23

Organisations that operate to influence company and public policy

Question 24

What are the three ways pressure groups can take action?

Answer 24

-Naming and shaming
-Direct action (protests)
-Lobbying by taking issues to the government

Question 25

How can social media negatively impact an MNC?

Answer 25

Stakeholders can inform people of unethical behaviour where information can spread rapidly