L9 - Own TNC: Ethical Issues and Impacts Flashcards
What is a TNC?
TNC’s are transnational companies that architect the market they are based in and are also normally considered monopolists of the market. They are known for building bridges between countries, glue together different cultures and economies together; through the use of their supply chains and marketing strategies e.g. Maharaja Mac.
What are Assembly Industries?
Assembly Industries are manufacturing operations that take the product of many different industries to create one final product e.g. Apple and their electronics where they combine different products from different industries such as the tempered glass panels, aluminium and electrical components for their logic boards.
Why are there huge inequalities through TNC’s?
This is because many of these TNC’s subcontract to third parties and therefore maintaining good working conditions and pay through the their chain is quite hard to maintain and therefore causes huge inequalities e.g. Acer, Apple and Samsung subcontracting to Foxconn.
How do TNC’s affect the economy negatively?
- Not paying tax in countries they operate in and by forwarding profits to low tax zones e.g. Ireland and Luxembourg. This making it harder for governments to raise capital for public spending and will increase austerity.
- Limited linkages as FDI does not always happens and links with local sources are not established and TNC’s may still be forwarding in bulk from external countries.
- TNC’s affect the global economy by creating huge wealth divides. This is causes by the picky nature of investment and the choice of only investing in South-East Asia rather then Sub-Saharan Africa.
How do TNC’s affect the economy positively?
- By creating jobs and helping the locals by providing a stable job a well as increase the economy through consumer expenditure.
- Depending on how many shops and outlets the TNC may sell its products may create revenue for the government through Value Added Tax on goods and services.
- TNC’s also help create political stability within countries as they want to look better to gain foreign investment.
How do TNC’s affect the environment negatively?
• They may cause environment degradation through th release or greater pollution as well as bad procedures to cut costs.
How do TNC’s affect the environment positively?
• Through their huge brand image can easily raise awareness of current issues with the environment. And therefore can gain the publics interest in helping the environment.
How do TNC’s affect the social culture negatively?
• Through making certain trends the norm, for example fast food being fast and essay at the Same time healthy. Which may not be in some cases e.g. McDonalds.
How do TNC’s affect the social culture positively?
•Some trend set may benefit social culture positively for example through the introduction of Apple Technology in education and health care.
