multi national corporations Flashcards
what is a multi lateral corporation
a company that operates in more than one country across the world
how much of world flows of goods, services and capital do MCC’s account for
top 500 MNC’s account for 70%
Why do MNC’s go global (4)
Lower labour costs - LIDC’s - higher profits
legislation on working conditions and environment may be less strict - LIDC’s - want to encourage investment
Widens market interest - global
increased profits
Advantages of MNC’s (5)
multiplier effect - creates jobs - increased income - greater consumption
increased incomes - raises living standards
improves trade balances - boosts exports
develops and improves skill levels of workforce
attract related investment by suppliers
Disadvantages of MNC’s
exploitation of workforce - LIDC’s - poor working conditions and wages
enviromental pollution - gov tolerates - due to investment
most jobs - low skilled - labour intensive
Leakages from LIDC’s back to MNC headquarters
competition may lead to closure of local firms
economic impacts of coke in India (4)
leakages from MNC back to USA
coke tried to monopolise Indian drinks market by purchasing competitors - can push local brands away
in kerala coke accused of avoiding tax payments to local government
MNC can close factories with India having no control
social impacts of coke in India (3)
80% of workers are on temporary labour - not protected by labour laws
pesticide levels were 24 times higher in coke products - than what would be allowed in Europe
India losing cultural identity - western influence
environmental impacts of coke in India (4)
environmental laws are not as strict - air and water pollution have increased
in kerala - bottling plants been accused of draining local water aquifer - leaves farmers with no water
3.8 litres of water for 1 litre of coke - kerala water tables dropped by 1 million in a year
exploitation of natural resources
advantages of Coca Cola in India (5)
brings capital, modern tech and skills the country didn’t previously have
increased exports - dependancy on primary imports reduced
Coca Cola invested over $1 billion in India
multiplier effect - 1 coke job - creates another 10 in local community - employs 25,000 - impacts 150,000 jobs
spent $10 million on community programmes
