Globalisation (year 9)

The countries where the brands are based are generally in the west (in MEDCs)
The countries where the products are made are generally in the east (LEDCs)
1. Cost of living will be lower and so wages can be lower so brands can make as much profit as possible as they spend as little as possible
  1. There is also normally a large demand for jobs e.g. China
TNCs / MNCs
1. Transnational corporation / Multi national company
  1. A company that operates in more than one country
2. Their aim is to make the most amount of profit
3. What attracts TNCs to LEDCs
  1. Ford
    1. Started in the USA and has now operated in 6 other countries
      1. India
        Large workforce - 60 million 'middle class' people
        Low wages
        Large potential market in the future
        india has a growing economy- people will have higher disposable incomes
  2. Significantly cheaper to produce goods
    1. Low wages and taxes
      1. There is a lower cost of living so workers can be payed less
    2. Fewer restrictions - more of an opportunity to make profit
      1. e.g. health regulations
        Lower set-up costs
    3. Large pool of labour
      1. People want the job more
      2. Need factories in less places
  3. Advertise in more countries around the world
Impacts on LEDCs (when a TNC invests in them)
1. Workers
  1. Positives
    1. Ford in India
      1. Higher than average wages
      2. Longer than average holidays
  2. Negatives
    1. Wal-Mart
      1. Bangladesh
        Lack of health and safety
        Rana Plaza, a sweatshop making clothes for UK high street stores collapsed and over 1000 workers were killed
        A factory was operating without a fire safety certificate - it caught on fire and 100s were killed
        Bangladesh has a maximum 60 hour working week but some claim that employees at Beximo regularly work 80 hours a week
      2. Biggest retailer in the world owning over 8000 stores selling a large variety of products and employing 2 million people
    2. Child labour
      1. Primark
        Children as young as 11 have been found working in squalid conditions in a Primark sweatshop that pays just 60p a day
2. Positives
  1. Less unemployment
  2. Some money goes to the governemnt
  3. Improve the wealth and quality of life for the people that live there and the image of the area is improved attracts more TNCs
  4. Causes industrialisation in LEDCs and NICs e.g. China
    1. Introduced to new technologies
      1. Advanced machinery
3. Negatives
  1. Some money goes to the government but the financial benefit for the MEDC is far greater
  2. Can increase the gap between rich and poor
    1. A few people become more wealthy while many reamin poor
Impacts on MEDC (when production moves abroad)
1. Unemployment
  1. Fewer than 10% of american workers are njow employed in manufacturing whereas in the 1970s, approxmately 25% were employed in manufacturing
2. Deindustrialisation as secondary manufacturing industries have moved abroad - they have developed tertiary and quaternary industries instead
  1. Increased gap between rich and poor - poorer, unskilled workers cannot find work
World Trade Organisation (WTO)
1. Promote free trade by persuading countries to abolish import tariffs
  1. Only international body overseeing the rules of international trade
2. "Run by the rich for the rich"
  1. Indifferent to the impacts on workers' rights, child labour, the environment and health

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Globalisation (year 9)

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	Created by Emily H about 10 years ago