Chapter 11 - Multinational Corporations Questions with correct Answers

Chapter 11 - Multinational Corporations Questions with correct Answers multinational corporation an entity headquartered in one country that does business in one or more foreign countries liberalization the economic policy of lowering tariffs and other barriers to encourage trade and investment Previous Play Next Rewind 10 seconds Move forward 10 seconds Unmute 0:00 / 0:15 Full screen Brainpower Read More transnational corporation as defined by the United Nations, a parent firm that controls the assets of affiliated entities in foreign countries The Dominance of the Largest Transnational Corporations the United Nations reports there are now 82000 transnational corporations. Of these, the 100 largest nonfinancial corporations are 12 percent of the number but have a disproportionately great impact on the global economy. All but 10 are from the US, Europe, and Japan. foreign affiliated business entities in foreign countries controlled by parent transnational corporations transnationality index (TNI) the average of three ratios: foreign assets to total assets, foreign sales to total sales, and foreign employment to total employment foreign direct investment funds invested by a parent MNC for starting, acquiring, or expanding an affiliate in a foreign nation portfolio investment the limited, speculative purchase of stocks and bonds in a foreign company by individuals or equity funds sovereign wealth fund a government entity that invests the savings of a nation. Since it is state-owned, its investment goals may be different from those of private equity funds international codes of conduct voluntary, aspirational statements by MNCs that set forth standards for foreign operations Sullivan Principles a 1977 code of conduct that required multinational corporations in South Africa to do business in a nondiscriminatory way soft law statements of philosophy, policy, and principle found in nonbinding international agreements that, over time, gain legitimacy as guidelines for interpreting the "hard law" in legally binding agreements Convention on Biological Diversity a treaty that requires nations to preserve biological diversity by promoting sustainable economic activity. It emerged from the UN-sponsored Earth Summit in 1992 and has been signed by 163 nations. Rio Declaration a set of 27 principles for sustainable development that emerged from the 1992 Earth Summit, a UN Conference of 172 nations and 2400 NGOs held in Rio de Janeiro communication of progress the required annual report of a company participating in the Global Compact. It explains how the company is implementing the 10 principles. bluewashing the act of a corporation cloaking its lack of social responsibility by insincere membership in the UN Global Compact