What is a TNC?

• A transnational corporation (TNC) is a company that operates in at least two countries. Its organisation is hierarchical, with headquarters and research and development and (R&D) department often located in the home country, while the centres of production tend to be overseas. Regional headquarters may develop as the company becomes more global.

Who are the biggest?

• Understand the characteristics and spatial organisation of TNCs.

• Reasons for growth and spatial organisation

• Analyse the social, economic and environmental impacts of a TNC.

• (Case study) on host / parent country.

Foreign direct investment –plants, equipment, property which is owned by business outside their own country

• They have grown because of the competitive nature of international economies and the ease at which products can be produced, traded and transported worldwide.

• TNCs' total annual sales are comparable to or greater than the yearly gross domestic product (GDP) of most countries (GDP is the total output of goods and services for final use by a nation's economy). Itochu Corporation's sales, for instance, exceed the gross domestic product of Austria, while those of Royal Dutch/Shell equal Iran's GDP.

• Together, the sales of Mitsui and General Motors are greater than the GDPs of Denmark, Portugal, and Turkey combined, and US$50 billion more than all the GDPs of the countries in sub-Saharan Africa.

• Partly as a result of their size, TNCs tend to dominate in industries where output and markets are oligopolistic, or concentrated in the hands of a relatively small number of firms.

• Though based predominantly in Western Europe, North America, and Japan, TNCs' operations span the globe. The Swiss electrical engineering giant ABB has facilities in 140 nations, for example, while Royal Dutch/Shell explores for oil in 50 countries

location of TNCs.What reasons does the cartoon suggest for location of

TNCs in China?

Complete tasks: where do they locate and why?

Use page 195 to help with your answers

If finish read the Geo factsheet and highlight important points.

The main features of the international division of labour.

· Manufacturing and some basic tertiary activities (call centres etc.) have increasingly been attracted to cheap labour locations in LEDCs and/or NICs although cheap production also a feature of some MEDC cities as sweatshops or out-working re-emerges.· Management activities are subdivided between local cities for immediate control and middle management organisation and global cities for the HQ activities and corporate planning.· Research and development is highly localised in core countries in identifiable clusters often associated with universities and particularly attractive environments.· Primary activities are widespread and more complex with the US being a major food exporter but many LEDC’s are still dependent upon commodity exports.

Task: Pros and Cons of TNCsIn pairs divide the slips of paper up between you.Take turns to read out what is written then decide

which pile to put it in:1. Pro for host country2. Con for host country3. Pro for origin (home) country4. Con for origin (home) countryOnce finish separate them into mostly Social or

mostly Economic impacts.Do you think TNCs are a good thing or not? Discuss

Task: Essay question• Make sure every sentence is RELEVANT – try to include a key word

from the question in every paragraph

• Write in paragraphs – a new idea or concept in each paragraph• Use geographical terminology• PLAN– think about your conclusion first (something thoughtful or

‘surprising’ if possible – e.g. GREY AREAS / alternative interpretations) – then select relevant case study material – then think how to write your ‘introduction’ paragraph so that you ‘set the scene’ without giving away the ‘clever conclusion’

• Specific locations – e.g. Dyson in the Uk not specific enough but Dyson in Whiltshire, SE England is much better

• Maps / diagrams / specific details (dates, etc.) are good – but you must show clearly how they are relevant to the question asked (e.g. use relevant labels rather than just drawing a standard sketch map of the location)

Task : Self assessment

Read through the model essay Using the marking scheme give it a rough gradeRead over your answerGive it a gradeSay which is better and why.

Homework

• Choose a TNC

• What does the company do?• Where did it start?• where else does it operate and why?• What impacts has it had on the host country• What impacts has it had on the origin country

http://video.google.com/videoplay?docid=5633239795464137680#

• http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article6143345.ece