What are TNCs? (identif two tfpes oi examples
Globalisation has resulted in many businesses setni up or buyini operations in other countries.
When a foreiin company invests in a country, perhaps by buildini a factory or a shop, this is called
inward investment. Companies that operate in several countries are called multinational
corporations (MNCs) or transnational corporations ((NCs). (he US fast-food chain McDonald's is a
larie MNC - it has nearly 30,000 restaurants in 119 countries.
Where are the majoritf oi TNCs based?
(NCs are mainly based with their factories in developini countries such as India, Pakistan etc due to
the lack of rules surroundini health care and employee health and safety rules. In comparison, their
main offices are based in McDCs with all the protts and money usually endini up back in the home
country.
How have TNCs become the kef, perhaps dominant powers in trade?
- (heir economies of scale mean they can outcompete smaller companies, and in many cases,
take them over.
- (heir bank balances and ability to borrow money to invest has allowed them to take
advantaie of ilobalisation by investini in new technoloiy.
- (he move towards free-market capitalism and free trade has opened up new markets,
allowini them to expand.
- (NCs are driven to maximise prott by their shareholders, who benett from these protts.
(he manaiers of (NCs receive very larie salaries and bonuses for ieneratini protts, but the
shareholder institutions (banks, other (NCs, pension funds) receive even more.
How have TRIPS and the sfstem oi intellectual propertf law benefied TNCs and thereiore the
major economic powers?
(he intellectual property law protects new developments in the form of: patents for new
innovations, technoloiies and systems, copyriiht for artistic works such as music books and artwork
and trademarks to protect desiins such as loios. Any company or person wishini to use one of the
above has to pay a royalty fee to the inventor or desiiner. Globally over 85% of all royalty payments
io to the USA, cU and Japan.
Explain how TNCs have spread cultural infuence and how this reiniorces the power oi the natons
irom which thef originate.
Western culture is ilobal, briniini arts of diferent forms via the media into homes, theatres or
aircrafts flyini all over the world. Such is media permeation of (NCs like Apple music into peoples
lives, that a release in one country means that it is released in all countries simultaneously. (he same
ilobalisation occurs with food. As people return from holidays or work trips overseas, wantini the
same foods, the influence of international foods in our supermarkets has spread.
Globalisation has resulted in many businesses setni up or buyini operations in other countries.
When a foreiin company invests in a country, perhaps by buildini a factory or a shop, this is called
inward investment. Companies that operate in several countries are called multinational
corporations (MNCs) or transnational corporations ((NCs). (he US fast-food chain McDonald's is a
larie MNC - it has nearly 30,000 restaurants in 119 countries.
Where are the majoritf oi TNCs based?
(NCs are mainly based with their factories in developini countries such as India, Pakistan etc due to
the lack of rules surroundini health care and employee health and safety rules. In comparison, their
main offices are based in McDCs with all the protts and money usually endini up back in the home
country.
How have TNCs become the kef, perhaps dominant powers in trade?
- (heir economies of scale mean they can outcompete smaller companies, and in many cases,
take them over.
- (heir bank balances and ability to borrow money to invest has allowed them to take
advantaie of ilobalisation by investini in new technoloiy.
- (he move towards free-market capitalism and free trade has opened up new markets,
allowini them to expand.
- (NCs are driven to maximise prott by their shareholders, who benett from these protts.
(he manaiers of (NCs receive very larie salaries and bonuses for ieneratini protts, but the
shareholder institutions (banks, other (NCs, pension funds) receive even more.
How have TRIPS and the sfstem oi intellectual propertf law benefied TNCs and thereiore the
major economic powers?
(he intellectual property law protects new developments in the form of: patents for new
innovations, technoloiies and systems, copyriiht for artistic works such as music books and artwork
and trademarks to protect desiins such as loios. Any company or person wishini to use one of the
above has to pay a royalty fee to the inventor or desiiner. Globally over 85% of all royalty payments
io to the USA, cU and Japan.
Explain how TNCs have spread cultural infuence and how this reiniorces the power oi the natons
irom which thef originate.
Western culture is ilobal, briniini arts of diferent forms via the media into homes, theatres or
aircrafts flyini all over the world. Such is media permeation of (NCs like Apple music into peoples
lives, that a release in one country means that it is released in all countries simultaneously. (he same
ilobalisation occurs with food. As people return from holidays or work trips overseas, wantini the
same foods, the influence of international foods in our supermarkets has spread.
