TNC (Transnational Company) Fundamental for globalisation Some TNC’s built their businesses by buying foreign firms e.g. Irish Guinness owned by Diageo Most are assembly lines (making things)- use chain of suppliers (parts all from diff countries) Embrace glocalisation (opposite of globalisation)- make products which appeal to local market o Levi created Denizen- attractive new label for China
Tesco Very popular as sells everything Products produced cheaply all over world Changes change in different countries e.g. HomePlus 60% of international profit from Asia 1,250 overseas stores Employs over 450,000 people Has glocalisation like in Thailand they have a wet market for the fruit and vegetable as that is what the locals are used to
Advantages of TNC’s: Creates jobs Improves economy of area Cheaper labour Higher profits Potential for better environment as TNC’s need to uphold reputation
Disadvantages of TNC’s: Takes away from local businesses Bad working conditions Child labour potentially Host country doesn’t always keep the money Tax avoidance Ruins environment with factories and transport
Some TNC’s profits are greater than the GDP of some countries Foreign Development Investment- increase in capital and spending in area due to investment e.g. Dyson in Malaysia- paid higher wages than normal so workers spend more and hence stimulate the economy
Effects of TNC’s: Economic o More jobs o investment social o pay male workers more than female so inequality o increased jobs cultural o products may change local traditions o glocalisation environmental o increased carbon emissions o due to reputation, emissions may decrease or increase in recycling
TNC’s could help countries but they are profit driven FDI more valuable than international aid.