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21 Cards in this Set
- Front
- Back
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List the positive economic impacts of TNCs on Host. |
1. Source of employment 2. Creates Multiplier effect in host country 3. Brings in investment and foreign currency to the country 4. Brings positive trade balance 5. Transfer of knowledge/technology
SIMPT |
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Eg source of employment + consider |
Walmart employs 1.3 million people worldwide Consider time frame- how long TNC stays in country |
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Eg multiplier effect |
Primary industries like rubber production can increase profits by supplying rubber products to manufacturing plants for the production of Nike products |
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Eg Investment and foreign currency to the country + consider |
In 2010, American companies like Ford, Nike, Apple injected 3.6 billion investment into China Consider shrewdness - prevent leakages via taxes/legislation |
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Eg transfer of knowledge or technology + consider |
Taiwanese laptop subcontractors that produce laptops for big brands like Apple use the transferred knowledge to product laptops under own brand names like Acer and Asus Consider extent of transfer- the know-how but not the know-why Consider appropriateness of tech transfer- lack of infrastructure and labour |
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List negative economic impacts of TNCs on Host |
1. Economic dependency on TNCS 2. Extraordinary political and economic power over the host country 3. Threats to local industries and businesses 4. Most profits are repatriated overseas 5. Branch plants only involved in assembly rather than design or marketing strategy
TREEB |
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Eg economic dependency on TNCs |
300 shoes factories in Dongguan, China have been shut down by TNCS and moved to Vietnam where costs are lower, which leaves workers vulnerable to unemployment |
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Eg extraordinary political and economical power |
Shell on Nigeria has exerted big influence over the government and has been accused of corruption and bribery to achieve its operation goals |
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Eg threats to local industries and businesses |
Prevalence of large retails TNCs like Walmart and Carrefour have forced the closure of many all local businesses in host countries where they operate as they can't compete in terms of cost and product variety |
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Eg branch plants only involved in assembly |
Major American TNCS like IBM have more than half their assets and employment in USA |
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List the positive social impacts of TNCS on Host |
1. Education and training for locals 2. Social development projects and engagement with local communities 3. Changes in Attitude and consumption patterns SAE |
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Eg provides education |
Texas instruments invested in research centers in India to train and employ thousands of Indian engineers at low costs |
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Eg social development projects + consideration |
Citigroup microfinance program provides financial aid to poor families to start small businesses Consider publicity stunts to improve corporate image |
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Eg changes in attitude and consumption patterns |
Because of WW2 many Asians boycott Japanese products but with globalisation and growth of Japanese TNCs many Asians have been buying Japanese products, hence less historical animosity |
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List negative social impacts of TNCs on Host |
1. Exploitation of local labour force 2. Limited skill transfer 3. Entry of harmful values 4. Loss of local cultural heritage through invasion of foreign culture LELE |
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Eg. Exploitation of local labour force |
Foxconn has been involved in a whole series of workers rights dispute at its Chinese factories |
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Eg. Entry of harmful values |
Nestle introduced formulae milk to LDCs but due to no sterilisation many kids developed health problems from dirty milk bottles |
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Eg. Loss of local culture |
Starbucks in forbidden city in Beijing |
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List positive environmental impacts of TNCS on host |
1. Adoption of environmentally friendly practices |
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Eg. Adoption of env friendly practices |
Lexus is a hybrid car that is less pollutive by toyota |
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List negative environmental impacts of TNCs on environment |
Shell in Nigeria caused deforestation, oil spills and environmental pollution due to gas flaring while extracting and processing oil from Nigeria |
