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Transnational corporations - Coggle Diagram
Transnational corporations
Globalization
: We are connected by the internet, communications, the ease of travel. People, money, information, ideas services and goods are constantly being exchanged between continents and countries. This causes cultural and economic changes in the countries involved.
TNCs
: They are corporations that extend beyond the borders of the country they are in. They try to take advantage of any opportunity that might appear somewhere else. (Ex: They use materials from another country or the assemble their products in another country)
Regulatory groups
: They regulate the flow of goods and services between countries, they reduce tariffs (Taxes), and make customs procedures easier. They make trading across national borders much easier, faster and flexible.
What is the connection between them?
Without international trade there would be no need for international regulatory groups. And without these groups, the international trade at the current massive scale would be impractical. And without international trade there is no globalization.
Advantages for developing nations
There is immediate communication with other countries around the world.
Better allocation of resources, lower prices for products, more employment worldwide and higher product output.
There is ease for transporting goods, people and information.
They help the country be more independent and this causes less conflict among other developing nations.
Cultural traditions and knowledge is passed between nations. As well as ideas because of technology, they are transferred so much faster.
Culture: There are a lot of ideas and innovations that people from industrialized countries will bring to the developing nations.
Economy: Developing nations will provide incentives for TNCs to have their workforce there like less taxes, etc. So more jobs will be offered and there is a chance at improving the economy.
Disadvantages for developing nations
The TNC can leave the country at any moment, leaving the employees without a job and making the economy worse.
The country (People who live there) where the TNC is based might not benefit very much if most jobs are being taken to other countries.
There are very low wages, poor working conditions and long working periods.
Employees and lower classes are not benefited because they are often exploited.
Mostly high classes are benefited from TNCs working there.
How they work around the world:
Globalization: Because of the internet and people traveling all the time, information and ideas are carried that way.
TNCs: They are companies who make their products in different parts of the world or assemble them where it is cheaper, which most of the time is not their own country.
Regulatory groups: They regulate how many products flow from one country to another and make trading easier for every country.