4.4 Flashcards
What is a multinational
A company that operates in its home country as well as in other countries around the world
-it maintains a central office located in one country, which coordinates the management of all it other offices e.g. administrative branches or factories
Ad to multinationals
-access to lower production costs
-proximity to target international markets
-access to a larger talent pool
-avoidance of tariffs
-efficiency
-development
-employment
-innovation
-avoiding protectionism
-gaining access to lower costs of production
-to operate closer to target international markets
Dis of being a multinational corporation
-increased legal burden
-increased tax compliance
-public relations
-political instability
Characteristics of multinationals
-high assets. value and turnover
-network of branches
-rapid growth
-use of tech
-management skills
-advertising spend
FDI involves
-is investment of foreign money into domestic structures, equipment and businesses
-FDI creates direct, stable and long lasting links between economies
-It encourages the transfer of tech and know how between countries so that a country can develop faster
Pos Effects of MNC
-creates employment
-increase skills base
-increased standard of living
-raises countries profile
-improves balance of payment
-improved infrastructure
Neg effects of MNC
-profit leakage
-low paid jobs
-interfere in politics of country
-poor health and safety
-increased urbanisation
-widens poverty gap
Bus ethics are
Moral guidelines which govern good behaviour
Ethical principles and standards in bus:
-define acceptable conduct in bus
-should underpin how management make decision
Behaving ethically isn’t the same as lawfully:
-Ethics (right vs wrong)
-law (lawful vs unlawful)
Examples of ethical issues
-pay and working conditions
-environmental damage
-exploitation of labour
-inappropriate marketing claims
-stakeholder conflicts
Advantages of ethical behaviour
-higher revenues-demand from positive consumer support
-Improved brand and business awareness and recognition
-Better employee, motivation and recruitment
-New sources of finance, E.G.ethical investors
Disadvantages of ethical behaviour
-Higher costs- e.g. sourcing from fair trade suppliers rather than the lowest price
-higher overhead- e.g. Training and communication of ethical policies
-A danger of building up false expectations (window dressing)
what is CSR
Corporate social responsibility is the extent to which a bus addresses the concerns and obligations to its wider stakeholders
What does the CSR look at?
-Human right indicator
-Communities
-Business, integrity, and ethics
-Product Responsibility
-The environment
Why multinationals need to be controlled
-to prevent abuse of market power
-to ensure that environment damage is reduced
-to ensure that MNC pay a fair amount of tax
-to ensure that MNC behave ethically
-to protect the rights of workers
How multinationals can be controlled
-legal challenges/rulings/court cases brought by gov against MNC
-campaigns by pressure groups to change the action of MNC
-Adverse media coverage that mobilises public opinion against the MNC
-use of social networks to organise a boycott that could hit sales
