Transnational companies (TNC) control a substantial part of the global economy, and have created a global

shift

Aim: To understand why the benefits of the new economy are not shared equally

To analyse the advantages and disadvantages of Nike as a TNC

What is a Transnational Corporation?

A company that operates in many different countries regardless of trade boundaries

http://www.bbc.co.uk/schools/gcsebitesize/geography/industry/globalisation_rev1.shtml

•What is the impression given in the cartoon?

•What is the attitude of the factory towards the Americans and workers?

•Why should we be careful about this resource?

The athletic shoemaker Nike has been criticized for practices in its developing

factories.

The problem with Nike• Nike is a Transnational Company which is based in Oregon USA• Nike products are instantly recognisable across the world due to

advertising using famous sporting heroes and the famous Nike tick

• Nike is the largest seller of sports footwear and clothing in the world. It operates it in over 140 countries worldwide and in the USA alone employs around 8000 people

• Nike is always bringing out new designs to compete within the market. Nike likes to keep its cost as low as possible so that it can make a tasty profit

• Therefore Nike has a lot of its goods, sold to you and me on the high street, made in other countries, mostly in Asia where labour is of low cost

• Watch the Panorama video about Nike and Gap. It discusses factories set up in Asia and how the workers are treated.

• Whilst you watch it write down as many facts as you can ready to discuss after the video.

Video QuestionsGood or bad? Look at the video and answer the following questions.

1. Name the countries mentioned in the video2. What countries do they operate in?3. Why do TNC’s operate in these countries?4. Who benefits most, the TNC or the country?

Explain your reasoning.5. What is a major problem associated with the

type of labour (work force) used in these countries?

6. Describe the sort of conditions these workers experience at work? Mention hours, wages, ages of workers, harassment.

7. Should the TNC’s leave these countries? What is your opinion?

8. Give some figures that may give you an idea of the money/profits/hours of work

Malaysia

U. S. A

Mexico

Japan

China

ThailandVietnam

Indonesia

Taiwan

Head office located hereBy 1992 most factories had moved from here to Asia

Workers were attacked by riot police after protesting when workers were sacked for asking for higher wages in this South American country which has 20 factories

In the 1980’s factories were opened here because of cheap labour, some were even opened in its capital city: Bangkok

Employees work for 65 hours a week for US$10 in this Communist country

Cheap labour is the main reason why Nike set up factories in this country, which is to the south of North Korea

An MEDC where in the 1960’s; training shoes were made here as labour was cheap. Now finances operations in Taiwan and Korea.

An Asian country with the worlds largest population it also has the largest number of Nike factories (124 in total)

Poverty dominates workers lives (earn US$2 a day) in this country where Jakarta is the capital city

Workers forced to work overtime in this Asian country which borders with Indonesia and Thailand

Cheap labour is the main reason why Nike set up factories in this country which is an island under part of China’s territory

South Korea

Our branded world

Their names and logos aren’t splashed on the front of factories in the LEDC’s

Rows of virtually identical giant shed-like structures

through its surrounding fence I could see mountains of Nike

shoes piled high

Carmelita Alonzo, who died, according to her co-workers, “of overwork.”

Alonzo had overnights almost every night for one week to

meet large orders. She had a two-hour commute to get

back to her family.

Lines of young women hunched in silence over clamouring machines.

Pure, 100 percent production at low, low prices.

‘207 factories that produce

goods strictly for the export market.

• Main TNC locations in Indonesia,

China, Mexico, Vietnam, the Philippines and elsewhere

TNC’s linked to these working conditions:

• – Levi’s, Nike, Champion, Wal-Mart, Reebok, the Gap, IBM and General Motors