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L6 pro and cons tnc's.r fpptx


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L6 pro and cons tnc's.r fpptx

  1. 1. Where am I?
  2. 2. Transnational Corporations (TNC’s)
  3. 3. Transnational Corporations (TNC’s) • TNC’s help to build bridges between nations. • TNC’s nothing new as the British Empire has been linking people and places, e.g. The East India Company. • Some key characteristics of TNC’s are; – That they build their business up through buying other companies (mergers and acquisitions) E.g. Jaguar is owned by Tata. – Manufacturing is subcontracted to third parties (hard to enforce environmental standards) – Manufacturing is more about assembly industries. I.e. the company (e.g. Jaguar) simply assemble what other people have made for them.
  4. 4. Transnational Corporations (TNC’s) • Turn to p104 and copy out the key terms; – Branch Plants – Consumption – Glocalisation – Parent Company – Tertiary Sector
  5. 5. Pro TNC Improved living standards through minimum wage Technology Transfer specific to markets Political Stability aided by economic stability Increasing Environmental Awareness Coorporate images and green credentials
  6. 6. Anti TNC Tax Avoidance – due to Concessions, so governments struggle to raise revenue Limited Linkages Local firms not used, business men com in from overseas Environmental Degradation Bhopal, India 1984 Union Carbide (USA) plant emitted poisonous gases leading to the death of thousands Increasing Wealth Divide Investing in Asia and not Africa TNC’s create new haves and have nots
  7. 7. Costs Benefits Host country • Profits go to the HQ country • Tax avoidance • Workers are paid low wages and may be exploited • Health and safety may be ignored • Environmental impacts may be large • Rise in Living Standards • Job creation • Supplier companies and linked industries may grow • Creates connections with the rest of the world • Political stability Source country • Loss of jobs due to global shift • Derelict land due to factory closures • The costs of regeneration • Dirty industries and pollution are ‘exported’ • TNCs may generate greater profits and pay more taxes Host and source costs and benefits
  8. 8. TNC’s and Global Wealth World’s top five TNCs (2006) TNC 2006 GDP of selected nations TNC Revenue ($bn) Country GDP ($bn) Rank Exxon Mobil 377 Thailand 206 34 Wal-Mart 351 Nigeria 115 48 Royal Dutch/Shall 318 Pakistan 128 45 BP 274 Bangladesh 65 57 General Motors 207 Zimbabwe 5 131
  9. 9. TNC: Case Study Tesco
  10. 10. Your turn • Using Tesco as a case study (p105-6) produce a mind map on this case study. • Include; – Facts – Does Tesco exploit or look after its workers? – what are both the costs and benefits of Tesco for host and source countries.