Global Systems: TNCs Flashcards
What is effective about mergers and aquisitions?
‘Dual listed’ corporate structure —> maintain HQ and pay corporate tax in both countries.
Evaluation —> allows for rationalisation of costs and streamlining of operations: profit goes to the country of origin: complicated financial losses and gains
What is a joint venture?
Two companies forming a partnership not a merger. Global financial flows can be affected, profit reparation, local knowledge can prove to be valuable
Positives of TNCs
- Global reach = increased market
- More income and increased wages = raised living standards for employees
- Local investment
- Job opportunities
- Boosts economy and development
- Economic boost
- Corporate Social Responsibility Program
- Infrastructure development
- Can forge political stability
- Thought to be one of the most effective wealth distribution tools globally
What is offshoring?
TNCs moving part of their own production process overseas e.g Dyson, Malaysia, 2002
Evaluation —-> Close to markets, spatial division of labour, job losses in the host country
criticism —-> profit loss, risks, how much decision making power goes with the investment?
What is Glocalisation?
Adapting a global product for the local market.
Evaluation —> Can be hard to customise some products, can increase profits as the most favourable products are sold to the people that favour them e.g intermediate technology is specifically tailored to the local people
Negatives of TNCs
- Exploitation of environmental and labour laws
- Monopolisation
- Low skill jobs, low skill workforce
- Corrupt practices (tax avoidance, double books, anti-union behaviour)
- Increased urbanisation
- Can amplify global divide (only operating in favoured countries)
