TNCs

Question 1

TNC

Answer 1

Company that operates in more than one country

Question 2

Spatial organisation

Answer 2

Flexable
HQ in host country
Subsidiary HQ on every continent
Production in LIC due to low labour cost

e.g. KIA has factories in USA and Slovakia to access EU and NAFTA markets

Question 3

Vertical integration

Answer 3

Supply chain is owned entirely by one company
Gives TNC control over all aspects

e.g. BP owns gas and oil exploration rights

Question 4

Horizontal integration

Answer 4

Company diversifies by expanding, merging or taking over competition or complementary businesses

e.g. Kraft food takeover of Cadburys

Question 5

Benefits to host country

Answer 5

Jobs
Income
Multiplier effect

Question 6

Benefits for TNC

Answer 6

Lower cost
Access to resources
Access to markets
Few controls

Question 7

Benefits to country of origin

Answer 7

Cheaper goods

Specialisation in financial service

Question 8

Problems for host

Answer 8

Poor working conditions
Exploited resources
Negative environmental impact
Economic leakage

Question 9

Problems for TNC

Answer 9

Ethics
Sweatshops
Damaging image

Question 10

problems for country of origin

Answer 10

Deindustrialisation