TNC's Flashcards
What has globalisation led to an increase of? (TNC globalisation)
Telephones, email, internet, trains and air travel
In what 4 ways is globalisation promoted? (TNC globalisation)
- Flows of capital
- Flows of production
- Flows of services
- Flows of people
How does flows of capital promote globalisation? (TNC globalisation)
Money that is going to be invested in infrastructure can be moved electronically
How does flows of production promote globalisation? (TNC globalisation)
Manufacturing has decreased in MEDC’s, so companies relocate to lower costs
How does flows of services promote globalisation? (TNC globalisation)
Services for economic activity are not based around material goods, e.g the banking sector
How does flows of people promote globalisation? (TNC globalisation)
People can move for employment or by for e.g. war
What have global markets led to? (TNC globalisation)
Advertisement strategy can be used globally, with same adaptations to suit specific markets e.g Chicken maharaja mac
What is a TNC? (TNC globalisation)
Companies that produce, sell or are located in 2 or more countries
What is TNC growth due to? (TNC globalisation)
- Mobility
- Means
- Motives
How does mobility increase TNC growth? (TNC globalisation)
Faster and cheaper transport
e.g container ships or movement for business trips
How does means increase TNC growth? (TNC globalisation)
Having money means its easier to make money
e.g banks will give loans to TNC’s because they are already established and will pay it back
How does motives increase TNC growth? (TNC globalisation)
To make profit
- Horizontal integration
- Vertical integration
- Economies of scale
How does horizontal integration work? (TNC globalisation)
Buying out all the competition
e.g Ford owns 30% of Mazda
How does vertical integration work? (TNC globalisation)
Owning each stage of the production
e.g Shell
How does economies of scale work? (TNC globalisation)
Expanding production, ‘buying in bulk’ philosophy
e.g Walmart
Why are TNC’s in big cities? (TNC globalisation)
Large quantity of skilful workers
Why are regional R&D near market areas? (TNC globalisation)
Make products specific to that area
Why are factories in NIC’s? (TNC globalisation)
Low labour costs
What is an economic positive of a TNC on the country of origin? (TNC globalisation)
Profits come back to shareholders and then money from taxes go into the government
What is an economic negative of a TNC on the country of origin? (TNC globalisation)
Smaller companies will be outcompeted
What is an social positive of a TNC on the country of origin? (TNC globalisation)
More research and development jobs are available for the highly skilled workforce
What is an social negative of a TNC on the country of origin? (TNC globalisation)
Unemployment
What is an environmental positive of a TNC on the country of origin? (TNC globalisation)
Decline in local manufacturing many decrease pollution
What is an economic positive of a TNC on the host country? (TNC globalisation)
Increased economic activity and then the multiplier effect will occur
What is an economic negative of a TNC on the host country? (TNC globalisation)
May close local businesses
What is an social positive of a TNC on the host country? (TNC globalisation)
TNC’s may invest in social development e.g education
What is an social negative of a TNC on the host country? (TNC globalisation)
May cause urbanisation when people move towards the factories
What is an environmental positive of a TNC on the host country? (TNC globalisation)
TNC’s invest in eco-friendly technology
What is an environmental negative of a TNC on the host country? (TNC globalisation)
less strict environmental laws may lead to more degradation
