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TRANSNATIONAL COROPORTIONS: Shell Global (WHY BE A TNC? (Increase…
TRANSNATIONAL COROPORTIONS: Shell Global
WHY BE A TNC?
Increase market share
Secure cheaper premises and labour
Avoid strict Health and Safety Regulations and Legislation in developed nations which are often lax in underdeveloped nations
To avoid and minimise tax
To take advantage of government subsidies/ incentives
To save costs on transporting goods to markets
To avoid trade barriers (like entering the EU)
To develop and international brans
ADVANTAGES TO HOST STATES
They bring new jobs to the state
Often these companies are at the forefront of new technologies and brings these to the state
Often these companies are more efficient that local companies
They bring new management
Often the export of their products can help a state's Balance of Payments (exports = imports)
They can lead to new businesses being set up locally once people have developed new skills
DISADVANTAGES OF TNC'S TO HOST STATES
They are very powerful and can influence governments
Government can subsidise the production, to encourage them to keep production
Donate to election campaign, means that they won't b written into legislation that will put them in difficulty
Local employers can rely on one large company
They may use up non-renewable resources
They can force local businesses "to the wall" who can't afford to be competitive
Their profits go back to the home state
They can mobile and may leave the state if available incentives are greater elsewhere
STATISTICS
Shell at a glance in 2015
70+ countries
93,000 employees on average
22.6 million tonnes of Liquid Natural Gas sold during the year
23 refineries -> give gas, petrol, diesel, plastic etc
3.9 million barrels of oil equivalent produced every day
Financial performance in 2015
Revenue: $265.0 billion
Income: $ 2.2 billion
Capital investment: $28.9 million
Investment in research and development: $ 1.1 billion
5th largest TNC in terms of revenue
Fast facts for sustainable development in 2015
$122 million spent on voluntary social investment worldwide.
Of this:
Around $93 million spent on local programmes for community development, disaster relief, education, health and biodiversity
Around $29 million spent on our three global strategic themes of enterprise development, road safety and energy access
In lower-income countries, 75% of spending by Shell companies went to purchase goods and services from local companies
AIMS
The primary aim of TNC's is to maximise profit
ROLES
Modernise the global economy through innovation and research
Improve standards of living by decreasing production costs and increasing the spread of technology. By making productions cheaper, lives are better because it allows more access
Integrate the global economy through production and trade, can lead to interdependence between states and reduce conflict
Foreign Direct Investment - e.g. Shell building a refinery in a state creates jobs, generates taxes for the state and production sold to other states counts towards that state's export figures
POWER
According to The Guardian, Shell spends approximately US$8.4m lobbying government in the USA
In 2015, it was discovered that Shell had influenced the EU's climate change policy announced in 2014 - a non-binding agreement of a 40% reduction in greenhouse gas emissions rather than a binding agreement
In 2010, Wikileaks revealed that Shell had infiltrated levels of the Nigerian government.
90% of Nigerias profits is oil, most is Shell
Shell inserted people in the government who report them back to the company so they can change what laws are going to be so it does not affect their profits
CRITICISMS
Shell has been criticised for th environmental damage caused by its operations around the world. However, it is not in Shell's interests to cause environmental damage and most of the damage is form emissions