TNC(Transnational Corporations)

TNC(Transnational Corporations)

1. economically powerful and politically influented.Bring costs and benefits to bouth the source and host countries

2. Example:McDonalds

   • reduce resource consumption
     • about 30%packaging is now recycled
   • in the Uk,McD edvertises all of its milk as as organic and along with beef.Everything from British or Irish farms
     • Consumers value this local source of ingredients
   • In Australia and New Zerland stand alone McCafes complete with coffe shop chains
   • menus are adapted to local tastes
     • halal meat and McArabia chicken wraps in the Middle East
     • vegetarion options in Hindu India

3. Positives of TNC's

   • Jobs:2,000 + technology workers in Bangladore are employed
   • Trade:China's economic growth,locating manufacturing plants (Free Trade Zone)
   • Connections:complex global networks create connectionsthat tie local and national economies into global system

4. Negatives of TNc's

   • Exploitation:exploiting workers in the developing world by paying low wages in sweatshop conditions
   • Unemployment:outsourcing jobs to the developing world can lead to job losses in developed countries
   • Identity:local cultures and traditions can be eroded by TNC brands

5. Transnational Tesco

   • 60%profits from Asia
   • 1,250 overseas stores and employs more than 450,000people
   • over 10 years Uks leading TNC
   • 2.7billion profit in 2006

6. The case against TNCs

   • Tax avoidence:may avoid paying full taxes in the countries where they operate
   • Limited linkages:FDI does not always help developing countries(links are made with local firms(raw materials) then more wealth may be generated)
   • Growing global wealth divide:Asia-Africa in creating new geography of have and have-nots
   • Environmental degredation:Methyl isocynate gas was emitted from the pesticide plant in Bhopal,Indiaowned by TNC(thousands deaths)

7. The benefits of TNCs

   • Raising living standardsinvest economies of developing countries.Risin wages,spread wealth.FDI helped China to overtake The UK and France
   • Transfer of technology:South Korean firms(Samsung) have learned a new design
   • Political stability:In Europe and China investment by TNCs has contributed the economic growth and political stability.While in Africa instability(civil war) distance from market
   • Raising environmental awareness:have a corporate image to uphold,they sometimes do respond to criticism