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 Advancements- enable 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