Transnational Corporations.

Transnational Corporations.

1. Advantages.

   • Brings work to the country.
     • Uses local labour.
   • Local workforce receives a guaranteed income.
   • Improves the levels of education and technical skill of the people.
     • Education rises the skilled local work force, helping employment with tertiary and quaternary jobs.
   • Brings welcome investment and foreign currency to the country.
     • Help development for LEDCs and helps trading for MEDCs.
   • Companies provide expensive machinery and modern technology.
     • Increases production and profit of company and country.
   • Increased gross national product/personal income can lead to an increased demand for consumer goods and the growth of new industries.
     • Helps country economy with internal and external trading.
   • Leads to the development of mineral wealth and new energy resources.
     • More efficient and cheaper source of energy, greater production.
   • Improvements in roads, airports and services.
     • Helping transportation, exportation, importation and trading.
   • Prestige value.
     • Image of the brand, causing work force to want to work for corporation.
   • Widens economic base of country.
     • Corporation comes in giving jobs and lowering unemployment.
   • Some improvement in standards of production, health control, and recently in environmental control.
     • usually in developing countries, allowing better life and education in the future and a skilled work force.

2. Disadvantages.

   • Numbers employed small in comparison with amount of investment.
     • They have less workers than what was invested, causing a negative profit or dept.
   • Local labour force usually poorly paid.
     • To gain profit the corporation pays extremely low wages.
   • Very few local skilled workers employed.
   • Most of the profits go overseas (outflow of wealth).
   • Mechanisation reduces the size of labour.
     • Mechanisation replaces workers, causing fewer locales skilled workers to be employed.
   • GDP grows less quickly than that of the parents company's headquarters, widening the gap between developed and developing countries.
     • The translational cop ration gets more money home, than the country that hosts it.
   • Minerals are usually exported rather than manufactured and energy costs may lead to a national dept.
     • Export products made in country to another one as it can be sold for more.
   • It's best to spend money on improving houses, diet and sanitation.
     • Helping transnational corporation rather than people in country.
   • Big schemes can increase national dept.
     • Building a new airport to service the industry can raise the national dept.
   • Decisions are made outside the country, and the firm could pull out at any time.
     • Leaves LEDC powerless to big corporations.
   • Insufficient attention to safety and health factors and the protection of the environment.
     • Factories close to suburban areas.