Lesson 3 How Has Globaisation Changed Manufacturing Tn Cs

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Lesson 3 How Has Globaisation Changed Manufacturing Tn Cs

  1. 1. Globalisation has meant the development of manufacturing across the world.
  2. 2. Objectives <ul><li>To explain the advantages and disadvantages of TNCs. </li></ul><ul><li>To know a case study of one TNC. </li></ul><ul><li>Textbook page 273-278 </li></ul>
  3. 3. Definition <ul><li>Huge organisations with business interests all over the world. </li></ul><ul><li>Headquarters and research and development facilities are usually located in country of origin – USA, UK, Japan </li></ul><ul><li>Production factories, offices and shops or farms are spread throughout the world to take advantage of different locations – labour costs are lower, laws more lenient or where governments want investment </li></ul><ul><li>Production occurs in richer areas where benefits include a skilled workforce and incentives are available to attract new investment </li></ul><ul><li>TNCs increase globalisation by linking together countries through the production and sale of goods </li></ul>
  4. 4. <ul><li>Key facts: The global economy </li></ul><ul><li>Globalisation – good or bad? </li></ul>http://news.bbc.co.uk/1/hi/business/1790941.stm
  5. 5. Ten largest TNCs in 2008 US Berkshire Hathaway Netherlands ING group Japan Toyota Motor UK BP Netherlands Royal Dutch Shell US ExonMobil US JP Morgan Chase US Bank of America US General Electric UK HSBC holdings Country Company
  6. 6. Advantages of a TNC <ul><li>Create jobs, train workforce, develop skills </li></ul><ul><li>Bring capital, modern technology and skills which the country does not have </li></ul><ul><li>Employees get more reliable income which leads to improvements in standard of living </li></ul><ul><li>TNCs improve local infrastructure – roads, airports, energy supply </li></ul><ul><li>Taxes paid to government which may then be invested in development </li></ul><ul><li>Technology and skills are transferred between countries </li></ul><ul><li>Multiplier effect – attract service sector jobs and economic development for the region </li></ul><ul><li>Some of goods may be exported to improve trade </li></ul><ul><li>Some of goods may meet a demand within the country </li></ul>
  7. 7. Disadvantages of a TNC <ul><li>Economic </li></ul><ul><li>Profits made by the TNC are paid to shareholders mainly in richer countries. Profits are not reinvested in poorer countries </li></ul><ul><li>Wages in factories and on farms are lower than in richer countries </li></ul><ul><li>Tax avoidance </li></ul><ul><li>Can pull out of a country easily and quickly </li></ul><ul><li>Jobs aren’t secure, key jobs go to outsiders </li></ul><ul><li>Branch plants susceptible to closure depending on global economic patterns </li></ul><ul><li>Governments have no say over TNCs </li></ul>Social people work long hours and working conditions can be poor <ul><li>Environmental </li></ul><ul><li>Farming and manufacturing may cause environmental damage </li></ul><ul><li>* Bhopal 1984 </li></ul>
  8. 8. Examples of TNCs Oil and gas companies Exon Mobil Royal Dutch Shell BP Chevron Retail Walmart Electronics Lucky Goldstar Sony IBM Microsoft Car manufacture Toyota Motor Daimler Chrysler Ford Motor General Motors Food Nestle UniLever Coca Cola McDonalds Chemicals and pharmaceuticals Glaxo
  9. 9. Key terms: <ul><li>Raw materials </li></ul><ul><li>Materials used to make another product </li></ul><ul><li>Industrial estate </li></ul><ul><li>An area of land designated for industrial buildings </li></ul><ul><li>TNCs </li></ul><ul><li>Companies with branches and operations in several different countries </li></ul><ul><li>Research and development </li></ul><ul><li>Activities to improve old products and design new ones </li></ul><ul><li>Brand </li></ul><ul><li>A symbol or name that distinguishes a company from its competitors </li></ul><ul><li>Corporate responsibility </li></ul><ul><li>How a company manages its impact on society and the environment </li></ul><ul><li>Multiplier effect </li></ul><ul><li>Initial investment and jobs lead to a knock on effect creating further jobs and providing money to generate services </li></ul>
  10. 10. Task <ul><li>Produce an illustrated A4 case study of a TNC </li></ul><ul><li>logo </li></ul><ul><li>Country of origin </li></ul><ul><li>Products and or services </li></ul><ul><li>Number of employees </li></ul><ul><li>Countries in which it operates - map </li></ul><ul><li>Advantages and disadvantages </li></ul>
  11. 11. Case study references Wal-Mart CGP revision guide pg 114 AQA B Nokia Pg 117 Nike Letts and Lonsdale pg 79 Toyota AQA A Pg 277 Understanding GCSE Geog pg 217 Siemens
  12. 12. AQA A 2009 Q4 <ul><li>Explain the growth in importance of TNCs in LEDCs (4 marks) </li></ul>
  13. 13. Homework x2 (one research, one write up) <ul><li>Produce an A4 fact sheet to explain what happened at Bhopal, India on 3 rd December 1984? </li></ul><ul><li>Include causes, effects both short term and long term. </li></ul>Websites: http://news.bbc.co.uk/onthisday/hi/witness/december/3/newsid_3240000/3240726.stm http://news.bbc.co.uk/1/hi/programmes/bhopal/default.stm
  14. 14. Further reading… <ul><li>McDonald's pulls out of Iceland </li></ul>

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