TNCs and Glocalisation Flashcards
TNC positives for host country
-Creates employment opportunities
-encourages economic growth
-urbanisation
-leads to multiplier effect
-develops a countries infrastructure
What is a TNC?
A TNC is a transnational coorperation.
A company with operations in more than one country. Investment in foreign countries lead to economic growth.
They develop infrastructure and increase trade.
TNC negatives - why might some remain switched off?
-Benefits host country, not location country, profit goes back to the host country
-Remittances
-Regulations are non exsistent
-Divert away from local businesses
-Destroys the environment
What is glocalisation?
Adapting good and services to increase consumer appeal in different local markets.
Glocalisation Case Study = McDONALDS
-Operates in more that 119 countries
-10 core items remain the same in every country but slightly adapted.
-Salient features are how adaptations align with the prevalent food tastes and preferences.
-The menu is adapted to suit socio-cultural religious food preferences and environmental conditions.
-Customers react distastefully to unfamiliar products.
Offshoring
TNCs move parts of their own production process to other countries to reduce labour or other costs.
Outsourcing
TNCs contract another company to produce the goods they need rather than do it themselves
Foreign Mergers
Two firms in different countries join forces to create one single entity.
Global production network
A chain of connected suppliers or parts and materials that contribute to manufacturing or assembly of the consumer goods. The network serves the needs of the TNC.
Foreign Acquisitions
When a TNC launches takeover of a company in another country.
Positive impacts of TNCs on host countries.
-Raised living standards
-Political stability
-Higher environmental standards
-Transfer of new technologies
Negative impacts of TNCs on host countries.
-Tax avoidance
-Growing inequalities
-Environmental degredation
-unemployment
Jaguar Land Rover Case Study
JLR is the uk’s largest automotive manufacturer and has been owned by the Indian transnational corporation sine 2008.
3 manufacturing sites ; Solihull, Castle Bromwich, and Halewood. Employing over 17,000 employees.
In 2014 sold over 460k vehicles - 26% in China and 21% overseas (Outside of Europe, NA, UK and China)
To gain better access to emerging markets and to reduce costs the company has invested in international marketing sites = offshoring
In 2012 the established a joint partnership with Chinese company Chery Automobile to produce vehicles overseas for several models = Outsouring
JLR established an assembly plant in India for several models in 2011 =offshoring
In 2014 an assembly plant was built North of Shanghai = Offshoring.
In 2015 announced plans to build a manufacturing plant in Slovakia and to manufacture vehicles in Austria with the Austrian company Magna Steyr = Foreign mergers
