Role Of TNCS

Question 1

How did they contribute to globalisation?

Answer 1

They operate in more than one country, their activities contribute to the spread of globalisation
Encouraged by the creation of trade blocks, removal of international barriers and promote economic liberalisation

Question 2

How do they maximise profit?

Answer 2

Reducing costs or generating higher revenues from new markets
They tend to do the production process in countries with low costs for lower wage rates, tax rates, transport costs and environmental regulations and contribute to their economic growth

Question 3

Explain outsourcing

Answer 3

They agree to receive goods and services in exchange for money
It may lead to less direct control over the production process and can lead to issues such as quality control or unethical practices

Question 4

Problems for home countries

Answer 4

Industries move to cheaper countries, contributing to job losses in home countries

Question 5

Can it impact the local culture in the countries where they settle?

Answer 5

Yes, it can impact local cultures and traditions eroding them in favour of western ideas

Question 6

Do they change their products to local consumers?

Answer 6

Yes in order to suit local tastes and increase its appeal
Ex: mc Donald’s opened a vegetarian restaurant in India as most people are vegetarian there