Nature/ Role Of Transnational Corprations Flashcards
Why do TNCs operate in more than one country?
Escape trade tariffs.
Find lowest cost locations.
Reach foreign markets.
Exploit mineral resource.
Why has TNC of the 21st century been called a ‘globally integrated enterprise’?
Locates different functions of business anywhere to get right cost / skills / environment.
Integrates production and deliver value worldwide.
Name common characteristics of TNCs.
Maximise global economies.
Source raw materials.
Outsourcing production.
Branding - recognisable.
Spatial organisation of TNCs.
HeAdquaters in city - HICs.
Subsidiary headquarters in each continent.
Research centres - HIC.
Where does production occur in TNCs?
Primary sector.
Where there isn’t unexplored resources.
LICs.
However, why is production changing?
New technologies can make access to new reserves of raw materials viable in home economy - fracking in North America
Where do TNCs in the secondary sector locate?
Manufacturing regions of developing counties.
South east Asia
Why do areas in south east Asia attract TNCs?
Labour costs lower.
InveStment in education - easier to train workers.
Good work ethnic - long hours/ few holidays
government incentives - enterprise zones / tax breaks.
Where do service bAsed TNCs located?
More footloose. Locate where low labour costs. Good education. Good proximity to markets. Language is good.
Outsourcing in India.
Well educated.
English speaking.
Lower cost.
Define agglomeration
Where similar industries locate near each other because of benefits gained by sharing ideas / resources.
