Glob+-+TNCs

You need to be able to describe the characteristics of TNCs and the advantages and disadvantages of them to the countries they have their factories in.


 * Trans-National Corporations (TNCs): a corporation or enterpirse that operates in more than one country
 * Multiplier effect: where initial investment and jobs lead to a knock-on effect, creating further jobs and providing money to generate services
 * Leakage: where profits made by the company are taken out of the country to the country of origin and so do not benefit the host country

__**The characteristics of TNCs:**__ · Transnational Corporations (TNCs) are large wealthy corporations · They are companies that have their headquarters in one country · They often have factories and other branches spread all over the world · Most TNCs have their headquarters in richer areas of the world · Research and Development usually takes place in the richer country · Production of goods usually takes place in poorer areas


 * __ The advantages of TNCs __**

· Can develop mineral wealth and improve energy production · TNCs can invest in big projects like dams to provide HEP · The money earned by local people goes into the local economy – multiplier effect · Local peoples education and skills can be improved · Local infrastructure such as road and airports can be improved


 * __ The disadvantages of TNCs __**

· Local people may be paid low wages · Few of the managers are local people · Most of the profits go abroad – Leakage · They can cause pollution – air and water due to lower regulation · Most of the minerals extracted are exported · TNCs might pull out with little warning – recession · Poor working conditions – long hours with little time for breaks · Safety can be compromised where laws are less stringent and workers’ health can be jeopardised

Toyota Factfile
 * Toyota was set up in 1937
 * Its headquarters are in Tokyo, Japan
 * It has 250,000 workers employed in 26 countries
 * It has factories inRussia, India, South Africa, Brazill and Mexico