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Transnational Companies. Transnational companies ( TNCs) or multinational companies ( MNCs) are big. There are many of them and they operate in more than.

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Presentation on theme: "Transnational Companies. Transnational companies ( TNCs) or multinational companies ( MNCs) are big. There are many of them and they operate in more than."— Presentation transcript:

1 Transnational Companies. Transnational companies ( TNCs) or multinational companies ( MNCs) are big. There are many of them and they operate in more than one country around the world. They have headquarters in one country and offices and factories in others.

2 These are the top five transnational companies by income in the world. What do they make?

3 RankCompanyHQIndustryRevenue $bn 1Exxon-MobilUSAOil377 2Wal-MartUSARetailing351 3BPUKOil318 4ShellUK/ Netherlands Oil274 5General Motors USACars and vehicles 207 CountryTotal annual income for country GDP ( $bn) Sweden444 Greece360 South Africa277 Malaysia180 Annual turnover for top five transnational companies. Annual income ( GDP) of selected countries. Compare the income of the top five transnational companies with the countries listed in the table below. What do you notice?

4 To be close to markets To find cheap labour To sell inside trade barriers To take advantage of incentives To spread industrial risks

5 Transnational Companies such as General Motors bring advantages and disadvantages to the countries where they locate. Sort the statements into advantages and disadvantages of transnational companies for host countries.

6 Brings work to the country and uses local labourMechanisation reduces the size of the labour force Local labour force usually poorly paidVery few local skilled workers employed Prestige valueLocal workforce receives a guaranteed income Most of the profits go overseas (outflow of wealth) Improvements in roads, airports and services Improves levels of education and technical skill of the people Numbers employed small in comparison with amount of investment Increased Gross Domestic Product/personal income can lead to an increase demand for consumer goods and the growth of new industries GNP grows less quickly than that of the parent company’s HQ, widening the gap between developed and developing countries Big schemes can increase national debtCompanies provide expensive machinery and modern technology Money possibly better spent on improving housing, diet and sanitation Decisions are made outside the country, and company could pull out at any time Brings welcome investment and foreign currency to the country Leads to the development of mineral wealth and new energy resources Some improvement in standards or production, health control, and recently environment control Insufficient attention to health and safety factors and the protection of the environment Minerals are often exported rather than manufactured and energy costs may lead to a national debt Widens economic base of country Advantages and disadvantages of TNC’s for host countries.

7 This map shows the numbers employed by General Motors around the world. It has its headquarters in Detroit USA but has factories around the world.

8 1.What reason is given by General Motors for the closure of the car assembly plant at Luton. 2.Complete the table below to show the economic and social effects the loss of jobs at the Vauxhall factory might have had on the Luton area. Economic Effects Of the closure Social Effects of the closure

9 Transnational companies ( TNCs) affect the countries where they locate their factories. Choose a TNC you have studied. Explain the advantages and disadvantages the TNC has for a country or countries where it has factories. ( 8 marks )


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