Trans-National Companies – TNCs

If you did a quick survey of the items in your house and count up the different examples of TNCs you would be surprised by how many are in your home. I counted mine and came up with 55 different TNCs. Our lives have ben made better and it can be claimed as being run by them.
You need to be able to explain what they are, where they operate and the advantages and disadvantages they bring.
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
Advantages of TNCs to poor countries
· 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
Disadvantage of TNCs to poor countries
· Local people may be paid low wages
· Few of the managers are local
· Most of the profits go abroad – Leakage
· They can cause pollution – air and water
due to lower regulation
· Most of the minerals extracted are
· 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
How can TNCs cause globalisation?
TNCs have been at the forefront of driving globalisation over the world. By setting up factories and businesses they are spreading information and businesses around the world.