1. Where am I?

3. Transnational Corporations (TNC’s)

4. 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.

5. Transnational Corporations (TNC’s)
• Turn to p104 and copy out the key terms;
– Branch Plants
– Consumption
– Glocalisation
– Parent Company
– Tertiary Sector

6. 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

7. 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

8. 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

9. 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

10. TNC: Case Study Tesco

11. 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.