TNCs Flashcards
1
Q
Definition
A
Corporations with operations in more that one country
2
Q
How many people worldwide do they employ?
A
40 million
3
Q
What percentage of the worlds trade do they control?
A
Over 75%
4
Q
Reasons for growth
A
- Locational advantages of being in different coutries. (Cost of land, labour, avaliabilty of resources and access to a wealthy market)
- Being a large corportation - favoured terms, more knowledge about labour markets and finance.
- Advances in communications and transport. - There is now a worldwide demand for goods and distances have ‘shrunk’ dues to transport development
5
Q
Heirachy (Case study: Nike)
A
- HQ and R&D in MEDC - Oregon, USA
- Branch plants in LEDC - Asia - shifts production to least cost location (Japan - Taiwan - Vietnam)
6
Q
Positive impacts on host country
A
- Creates employmen, upwards spiral (Eg. Nissan employs 4500 people in Tyneside directly.)
- Introduces new working methofd (Eg. JIT and quality control) to increase efficiency and productity.
- May lead to increase in exports (eg. Nissan exporting cars to the EU reduces the trade defecit)
7
Q
Negatives impacts on host country
A
- Can harm the environment. (Eg. BP Deep horizon disaster - 4mil barrels spilled)
- Cause human death (Eg. Union Carbide in Bhopal, India. In 1984 toxic gas released killing 2500 people)
- Explotation of workers (Eg. Nike 45 workers share $1.60 for a $70 pair of shoes)
- Civil War ( Eg. Rio Tinto in Paua New Guinea. Mining operation - civillians fought againt gov. army as it was a major contributor of GDP
8
Q
Positive impacts on country of origin
A
- Increased income for employees and production costs are lower.
- Increased profits so benefits share holders through dividence
- Potential to enter new markets (Eg. Dyson in Japan and Malaysia)
9
Q
Negative impacts on country of origin
A
Creates unemployment in both the industly and component suppliers. (Eg. Dyson lost 800 jobs.) Less disposable income - downward spiral
