TNCs

• what does TNC stand for?

  Transnational Corporation
• what is a TNC?

  a large enterprise operating out of multiple countries, usually with a global headquarters and regional outposts serving one or multiple aspects of the company's business
• where are the HQ and research and development sectors of a TNC usually located?

  HICs
• where are the regional headquarters and branch plants of a TNC usually located?

  LICs
• what are some reasons for the growth of TNCs?

  • cheap labour
  • flexible workforce
  • cheap land
  • fewer environmental restrictions
  • technological developments
• what are some benefits of TNCs to the country of origin?

  • return of profits from overseas
  • reduced environmental damage at home
  • infrastructural development
  • increased opportunities for promotion
• what are some drawbacks of TNCs to the country of origin?

  • job losses
  • increased imports to replace those once manufactured at home
  • closure of factories
  • some loss of revenue from not selling goods abroad
  • possible 'brain drain' as higher skilled workers follow research and development jobs
• what are some benefits of TNCs to the host country?

  • increased employment
  • import of new skills, transfer of new technologies and working practices
  • valuable foreign currency brought into a country
  • positive economic multiplier effect
• what are some drawbacks of TNCs to the host country?

  • low skill jobs
  • managerial jobs are talken by people in the country of origin
  • most of the profits leave the country
  • vulnerable to the 'globalisation of decision making'
• why do TNCs operate in more than one country?

  to escape trade tarrifs, to find the lowest cost location for their production, to reach foriegn markets more effectively, to exploit mineral, or other resources available in foriegn countries
• what are the main characteristics that define a TNC business?

  maximising global economies of scale by organising production to reduce costs, sourcing raw materials or components at the lowest price, controlling key supplies. control of processing at each stage of production, branding of products or services so they are easily recognisable, outsourcing as production