TNC Flashcards
TNC
This is a multinational corporation that manages production or services in more than one countries. They operate on a global scale, transcending the borders of national states, some are richer than countries e.g. Wal-mart has more money than Poland.
Stats about TNC
Been an explosion in TNC’s in the past 100 years called the “corporate century”
7000 in 1970 to 63,000 in 2010
Although they extend across the globe in terms of production and sales 90% based in west where profits tend to return.
Intergovenment organisations
Many of the transnationals are governmental in nature, functions include:
-Legal-political- dealt with govence e.g. UN
-Economic- Agencies concerned with finical + trade organisations e.g. world bank
Single remit- specific tasks such as WHO
Non-govenmental Organisations
No controlled directly by the government or state.
Relief and Development- charities such as oxfam
Lobbing- raising particular issues to governments to take action such as Amesty International.
-Some of the largest are commercial in nature manufacture products and have significant influence on world.
Neoliberal
TNC’s are essential to neolib, they are a symptom of progression and a powerful catalyst to bring about development. Adam Smith.
(Criticisms)
Free trade zone
There are area without trade barriers such as taxation + minimum wage law. This encourage FDI. Neoliberial prefer two way trade (bauer and Erixson)
Modernisation theory
TNC’s reduce:
Economic barriers- Provides jobs, technology and infrastructure needed to get out of COP, rostows modernity.
Cultural barriers- TNC can spread western values and replace backwards looking ones.
(Criticisms)
Cardoso
Argues that we should not think of TNC involvement in the majority world as separate from colonialism it is the legacy of the successors. Dependency see it as neo-colonialism.
Soros
Argues that market fundamentalism has produced a world of uncontrolled capitalism, only instinct is to control capitalism (chomp sky)
Loopholes
Since TNC operate in numerous countries they are able to exploit loopholes “pick and mixing” the legal systems, tax avoidance scandles “starbucks”
False advertising- nestle baby formulae.
Environmental costs
Mass industalisaion is not possible because there is not enough resources, TNC’s extract the majority of the worlds minerals and harvest much of the word.
Nike
They operate swear shops and have bad pay and conditions. They have been found to leave counties that have progressive labour laws. 70’s made in Korea they made unions so nike pulled out moved to vietnam with cheap exploitable labour is abundant.
Cadburys
2009 no longer using cocoa power using african children, fair trade but its just on their “dairy milk bar”.
Punishment
Its difficult to punish TNC as fines may not even have an impact this is why recidivism rates are high. Furthermore it could be argued that if MD’s are punished it won’t have an effect as its the structure and nature of the “corporation”
