Multinational Corporations
Or Transnational Corporations
Background
• Headquarters of these corporations are in
industrialized countries.
• Transnational companies, (TNC) (also known as
multinational companies) are very large businesses
that have offices and factories all over the world.
• The headquarters and main factory are usually located
in developed countries (often USA and Japan).
• Smaller offices and factories tend to be in the
developing countries where labour is cheap and
production costs low.
• In the past 30 years, the TNC’s have grown in
size and influence.
• Some of the largest ones make more money in
a year than all the African countries put
together.
• The world’s 500 largest companies now
control at least 70% of the world’s trade and
produce more than half of the world’s
manufactured goods.
Why Rapid Expansion?
GLOBALIZATION!!!!!
Why Rapid Expansion?
• Scientific and Technological Advancementsenable TNC’s to direct operations from anywhere
• Cheap, unskilled labour in LLDC (Least Developed
countries) plus a reduction of transportation and
communication costs.
• Establishing branch plants in LLDC’s allow TNC to
avoid tarrif barriers
• LLDC’s invite these TNC’s to set up
• Lack of standards in LLDC’s environmental, labour
etc.
Arguments for MNC’s
•
•
•
•
Supply wealth and technology to LLDC’s
Provide goods and services to LLDC’s
Create jobs
MNC’s are an instrument of international
stability and cooperation
• MNC’s reflect the global economy
• They are a fact of life.
Arguments Against MNC’s
• Countries give up local power to foreigners
• Natural resources are placed in the hands of foreigners
• Poor are induced to spend their money on things they
don’t need
• Money made is sent back to “home” country
• LLDC have to pay for western technology
• Companies often bribe governments
• Deplete “local” work forces and stifle cultural growth
• Makes LLDC’s subject to the fluctuations of the global
economy- prices, layoffs.
Top Companies
• Top Companies
Worst Offenders
• Kraft, Miller Beer, Imperial Margarine, M&Ms
(Child Slave Labour), Nestle (Child Slave
Labour), Clorox (Animal Testing), Maybelline
(Animal Testing, Carcinogens) , Full Throttle (
Human Rights Violations, Clean water
violations), Walmart ( Human Rights
violations, Pollution) Coke (Human Rights
violations)
Some of the Best in 2014
• Toyota, Kettle Chips, Aveda, Sony, Ikea