Global industries 4.4 Flashcards
What is a Multinational corporation (MNC)?
A business that is registered in one country but operations in different countries.
What are three impacts of MNCs on a local economy?
-Increased wages above local average
-Job creation
-employable training methods are introduced
What are three disadvantages of MNCs on the local economy?
-May exploit workers if employee laws are weak
-Pay relatively low wages
-May relocate workers and not create jobs for the local economy
What are two advantages of MNCs on local businesses?
-May improve the local economy
-May be joint venture opportunists with the MNCs
What are two disadvantages of MNCs on a local business?
-MNCs can produce for less and become hard competition for local businesses
-Reduce the supply of workers
What is one advantage to the local community of MNCs?
MNCs normally invest to improve the infrastructure
What is one disadvantage to the local community of MNCs?
May cause damage to the environment in production processes
What are three advantages to the national economy if MNCs operate there?
-FDI flows, invest in the economy
-Technology and skills transfer
-Balance of payments
What positive impact do MNCs have on balance of payments?
Can improve balance of payments as exports will be higher
What negative impact do MNCs have on balance of payments?
The MNC may buy raw materials from abroad which increases a countries outflows
What is balance of payments?
A statement showing all of the financial transactions between a country and the rest of the world
What is the positive impact of MNCs on business culture?
Domestic businesses may influenced by MNCs and it may promote entrepreneurship
What is the negative impact of MNCs on business culture?
MNCs may promote unethical business practices
What is impact on a business of unethical practices?
-Can damage the brand
-Pressure to become ethical
What are the four ethical considerations for businesses?
-Stakeholder conflicts
-Environmental
-Supply chain
-Marketing
What might a management V worker conflict entail?
Management may be more focused on output or reducing costs than worker safety
Workers want a safe and comfortable environment
What might a management V owner conflict entail?
Owners want managers to maximise profits and don’t focus on employee hapiness
Managers may Sacrifice some profit to make sure employees are comfortable
What unethical pay and working conditions do some MNCs do?
-Child labour
-Low wages
-Cramped working conditions
What are two environmental issues that MNCs may do?
-Poor waste management due to MNCs wanting to cut costs
-Lots of emissions which could lead to health issues for the local community
What are two supply chain considerations for MNCs?
-Child labour
-Exploitation of labour (low wages poor conditions)
What are two marketing considerations for MNCs?
-Misleading product labelling (false information)
-Inappropriate promotion
What are four ways to control MNCs?
-Legal control
-Social media
-Pressure groups
-Political influence
What are pressure groups?
Organisations that operate to influence company and public policy
What are the three ways pressure groups can take action?
-Naming and shaming
-Direct action (protests)
-Lobbying by taking issues to the government
How can social media negatively impact an MNC?
Stakeholders can inform people of unethical behaviour where information can spread rapidly
