General Globalisation Revision 6 Flashcards
(28 cards)
What does TNC stand for?
Transnational Corporation
TNCs operate in multiple countries and create links between them.
Which regions have a high concentration of Fortune 500 company headquarters?
USA, Europe, Japan, China
These areas are significant for the presence of major corporations.
What is one benefit of TNCs investing in foreign countries?
Creation of jobs and contribution to the economy
Foreign Direct Investment (FDI) by TNCs can stimulate local economies.
What are the two types of integration used by TNCs?
- Horizontal integration
- Vertical integration
These strategies help TNCs expand their operations and control over the supply chain.
Define horizontal integration.
Taking ownership of part of the supply chain
This involves acquiring companies at the same level of production.
Define vertical integration.
Taking ownership of another company in a similar industry
This often leads to greater control over the industry, such as in the food sector.
What is an example of vertical integration?
Control by large companies over smaller companies in the food industry
This can be seen in the ownership patterns of brands like Nestlé and Coca-Cola.
Fill in the blank: TNCs create links through _______ by investing in foreign countries.
Foreign Direct Investment (FDI)
FDI can include investments in factories or mergers and acquisitions.
True or False: TNCs typically only operate within their home country.
False
TNCs are characterized by their operations across multiple countries.
What are TNCs?
Transnational Corporations (TNCs) are companies that operate in multiple countries.
What can disrupt supply chains and affect TNC profits?
Natural disasters, such as the 2011 Tohoku Tsunami.
What was the impact of the Rana Plaza factory collapse in 2013?
1134 people were killed, affecting garment TNCs’ profits and production sources.
What scrutiny do TNCs face following events like the Rana Plaza collapse?
Scrutiny over exploiting workers and providing unsafe working conditions.
How do TNCs use global supply chains for consumer products?
To spend less money on manufacturing.
What is outsourcing in the context of TNCs?
Outsourcing is when TNCs contract tasks to other companies to save money and time.
Which company is known for outsourcing its manufacturing process?
Apple.
What is offshoring?
Having factories in LICs to benefit from lower labor costs and weaker regulations.
What ethical issues arise from offshoring?
Exploitation of poorer citizens to maximize profits.
What is glocalisation?
The adaptation of goods or services by a TNC to meet local needs or tastes.
Give an example of glocalisation in grocery shops in Bangladesh.
Grocery shops do not wrap their vegetables, as customers judge purchases by feel.
Why did McDonald’s create a menu without beef or pork burgers in India?
Due to the large population of Hindus and Muslims.
What must car makers change to suit local driving conditions?
The orientation of the car to match which side of the road people drive on.
What does the global shift refer to?
The relocation of manufacturing and industrial activity from the West to the East.
Before the 1960s, where were most manufacturing industries located?
In the West, particularly in Europe and the US.
