Discuss the Role and Impact of Tncs in the Global Economy Essays

Globalisation is such a complex and broad topic with numerous aspects that it is described by academics in a large variety of ways although most of which overlap in one way or another. However, Stief (2014) simply describes it as a process that presents a connection and interaction between countries and nations particularly in economic, cultural and political aspects amongst others, with Trans National Corporations (TNC’s) such as McDonalds being increasingly present in Asia, or Spanish films being shown in New York as well as groups of countries coming together to create organisations such as the United Nations and European Union. Key characteristics of globalisation include improved technology, Non-Governmental Organisations, spreading of knowledge and importantly the movement of people and capital which this report will be focusing on. It is argued that globalisation would not be able to occur without the ease of movement of both capital and people between countries, but it is important to understand what effects globalisation has had on this integrated movement. European Union is an organisation that can be looked at when trying to find this as it is a closely integrated group of countries in Europe where the effects of globalisation are seen on a daily basis in almost all sectors of the member countries from education to healthcare. One of the numerous policies and agreements within the EU is the ability for both people and goods to move freely between

The transnational model was developed to support the needs of large, multinational companies. This model consists of multinational corporations-experienced in international markets with facilities in several foreign countries that simultaneously utilize technological advances, innovation, global learning and efficiency to be successful. These multinational organizations adopt organic structures, similar to the learning organization, that are flexible, unified and coordinated through corporate culture and shared visions and values of its employees (Daft,

TNCs dominate industrial production including manufacturing and services, therefore further dividing the gap between the rich and the poor, and being the main leader of globalisation as a consequence.

In many poor countries, their local economies can be boosted by the TNC companies as they also earn part of the profit of the company. In addition, it will create more jobs for the local population. However, most of the jobs are payed very little or are either taken over by the newly created technology.

Although these new technology, more like companies, enter a new land looking for cheaper work force, it stills gives the country a huge boost in the demand for low level skilled workers. In the article “In what way has globalization affected unemployment?” Marsida T. Najdeni said that “What used to be done by low skilled workers in the U.S., it is probably getting done in sweatshops across Asia. Nonetheless, these sweat shops are all these Asian workers from the other side of the world have to survive. The famous Cambodian sweatshops to us might be unimaginable, but to the people living there is the only way of making their daily bread.” meaning that the gain of these countries mean losses to some already developed countries, like the US for

A problem that often is talked about concerning developing countries is the issue of western countries using poorer countries for production and cheap labour. It is often argued that this is something unfavourable, in two ways. First of all, it is argued, often by the progressive crowd, that it has a negative effect for the people in developing countries working in the factories, and their economy. It is said that the pay is too low and conditions bad, and that people are forced to take the jobs. Second of all, it is argued, often by the more conservative crowd, that this has a negative effect on the countries using the labour as well. People lose their jobs because they can’t compete with the low wages and living standards in developing countries,

A TNC (transnational corporation) is a company that operates in no less than two countries and has a global outlook. TNCs have a long history going back to the 16th Century in terms of trade such as spices, but it’s not until C. 1945 that companies started to form acquisitions and mergers. The one key reason why these businesses have been so successful in their area of expertise globally is because they can take advantage of spatial differences in the factors of production worldwide. They are able to exploit differences in the availability of capital, labour costs and land cost, which we as a world have seen, especially in far-east

The definition of the TNC's is any corporation that is registered and operates in more than one country at a time; also called a multinational corporation. They operate franchise all around the world like Coca-Cola, Google, Nike, McDonalds and many, many more.

There are so many ways to evaluate the role of TNCs, and how they shape and contribute to the economy. Before all this one must understand what globalization is and why it is very important to TNCs. Globalization is simply the integration of culture, trade, natural resources and factors of production between nations. But, economic globalization refers to increasing economic interdependence of national economies across the world through a rapid increase in cross-border movement of goods, services, technology and capital (Shangquan, 2000). The main key players are transnational corporations (TNC) sometimes known as multinational corporations (MNC).TNC’s are firms that have attained the power needed to co-ordinate and operate across the boundaries of many nations. Usually the main purpose of TNCs is to maximize profit and increase their selling market. This is why many TNCs are interested in globalization because without an effective and free trade global economy, many (if not all) will not be able to function and be successful. Some economist feel differently about how TNC’s

The term ‘corporation’ encompasses a range of corporate structures including subsidiaries, holding companies, and joint ventures. ‘Transnational corporations’ are those corporations (and their related entities) that have operations in more than one state. Such entities are able to operate across national borders, sell products and source labour in multiple markets, and shift production, resources and expertise as and when required. There is no doubt that global firms are engines of prosperity and growth across many areas of the world. Corporations generate valuable employment and educational opportunities, revive living conditions in flagging communities with much-needed investment and new technologies, and enhance the prosperity of those states able to ride the globalization wave.

One positive outcome to relocating production to the global south is that companies are able to take advantage of the lower minimum wages and fewer labour laws in third world countries in order to supress the cost of production and increase their profits. Another positive outcome to relocating production to the global south Is that it provides people with employment opportunities that they otherwise would not have access to (Ross & Morgan, 2015). Benjamin Powell, director of the Free Market Institute, rationalizes that the waged work being outsourced to the global south leads to the eventual improvement of living standards because the work kickstarts a process of development through the introduction of physical capital, new skills and technology (Ross & Morgan, 2015). Although the work provided may raise living standards over time, it is more common for big corporations to use the lack of alternative work as leverage to supress costs and exploit workers even further (Ross & Morgan, 2015). In conclusion, the relocation of production to the global south generates some economic benefits for garment workers by providing waged work but ultimately corporations benefit the most as they are able to exploit the vulnerable situation of workers to yield

When a company decides that it is time for it to grow from a national into a multinational company (MNC) there are cost and benefits involved. A multinational corporation is a company that has productive assets, which they own and control in countries other than their own. An MNC is unlike an enterprise, which exports products and services, but the MNC directly invests into developing countries, where it can benefit from producing products at a lower cost, while increasing its market share. Whether this has a positive or a negative impact for the company and its host state, is dependent on the

The FreeLegalDictionary.com states that a TNCs is "Any corporation that is registered and operates in more than one country at a time; also called a multinational corporation." A transnational corporation is a corporation that has its headquarters in one country and operates wholly or partially owned secondary offices/stores in one or more other countries. These 'subsidiaries ' report to the central headquarters. The growth in the number and size of transnational corporations since the 1950s has generated controversy because of

A set of new difficulties have taken rise as MNCs' continue to take over most economic activities. Today, they outnumber states in terms of size and power. General Motors is an outstanding example to explain this phenomenon. The MNC is run at a scale larger than seven nations together. The power it has in terms of economics and politics, allows it to control a huge chunk of the world. Hence, it is worthwhile to note that since the 1990's when there were only 3 MNCs controlling the world's economies, the number jumped up to 15 within the span of 10

Protectionist interventions by host states provide challenges to MNCs wishing to expand into those countries. They constitute trade barriers limiting a firm’s ability to disperse its production activities in global locations where they can be performed most efficiently (Hill, 2011p224-5). Tariffs, for instance, raise the cost of exporting products to the country. This may put the MNC at a competitive disadvantage compared to domestic firms in the industry. The firm may find it more economical to establish production facilities locally in order to compete on an equal footing with indigenous firms. Thus an opportunity is availed to produce locally provided a cost benefit analysis and environmental factors such as