Transnational Corporations (TNCs)

A Transnational corporation are multi-business companies that operate in more than one country.

Transnational corporations (TNCs) have become an increasingly powerful part of the global economy. These companies are able to merge and acquire each other, to form larger entities which end up dominating the international marketplace. While the aim of TNCs is to make a profit for their investors, they have also come to play a huge part in of our lives - the products we buy, the foods that are sold, the entertainment on offer and so on. Although it seems that the choice of products and services that we want to spend our money on has increased, in fact it can be said that this choice is being made for us by what a small number of giant companies decide to sell. (http://www.munich-business-school.de/intercultural/index.php/Transnational_Corporations:_Concept_and_Relevance)

Impacts of TNCs

Positive	Negative
Creates jobs	Exploitation of workers e.g. China
Frees up trade in the world	Undercutting local business
Invests in the local area e.g. transport	Aesthetic issues
	Pollution
	Over powerful

Examples of TNCs

Nike:

• Founded in 1971 in Oregon, USA
• Introduced to supply items for marathon running
• Manufactures mainly in Asia, taking advantage of the low production costs
• Approx 260,000 employees

Toyota

• Founded in 1933
• 8 million vehicle productions a year
• in 2005, they earned over $10billion, which made it the 10th largest company in the world.
• They are the 3rd largest car maker in the world
• They have approx 55 branches in 25 countries, selling in a further 135 countries.

Ikea

• Set up in 1940's in Sweden
• Went worldwide in 1980's
• Opened their first UK shop in 1987
• In 2005 they had 4.75 million customers worldwide
• They currently have over 200 stores in over 30 countries
• Employ over 90,000 people

Sing Song...

Whilst searching for a short video which compromises all of what Globalisation means, I came across this little beauty. It combines some aspects of globalisation whilst being fun at the same time. This would be a great video to show towards the end of this topic when teaching it in class as it creates a light hearted atmosphere between students and when it comes to exams, they may remember this little video...

The Divisions of the World

For the majority of the twentieth century the world has been split into three main divisions:

• The First World
• The Second World
• The Third World

The divisions are mainly based on political and economic figures. They may be less valid in today's climate but they are still used widely in the media.

The First World
The First world mainly comprises of MEDCs, where a capitalist stream prevails, they tend to be described as free market economies, in the majority of the countries there is a varying degree of government intervention.

Countries include: UK, USA, France and Germany

The Second World
The Second world consist of socialist and communist countries where the governmental economic control is paramount. They are a mix of MEDCs and LEDCs. During the break up of the Soviet Union in the early 1990s and the communist bloc of Eastern Europe states in 1985-1995 started the process of economic restructuring of these countries.

The fall of communism allowed these former communist countries to move towards the First World. This has lead to the decline of the Second world.

Countries include: China, North Korea, Vietnam and Cuba

The Third World
The Third world consist of mainly of poor and underdeveloped countries (LEDCs and LLEDCs), these countries are mainly located in Asia, Africa and South America. Many of these countries in the Third world have recently gained political independance from colonial powers and they are now being drawn and welcomed into the global economy.

With these three divisions of the world in mind, the world is also split into the 'North South Divide'. This line separates the rich north (MEDCs) from the poor south (LEDCs). This is shown in the diagram below:

* Taken from www.rsrevision.com/gcse/christian_perspectives/poverty/causes/introduction.htm

The only exception to this rule is Australasia. Below is a table showing some of the differences between the countries north and south of the line:

North	South
Developed countries	Developing countries
25% of the world’s population	75% of world population
Use 80% of the world’s resources, e.g. food and fuel	Use 20% of the world resources
80% of world income	20% of world income – most get less than £1.25 a week
Life expectancy – 70 years	Life expectancy – less than 50 years
12 children out of 1000 die before age 5	100+ out of 1,000 die before age 5
94% of the world’s healthcare	6% of the world’s health care
470 people per doctor, 140 people per nurse	14,000 people per doctor, 3,000 people per nurse
Easy access to medical care	70% never encounter medical care
Water - 100% access to clean water. No droughts.	Water - 70% get disease ridden, dirty water. 1 in 7 have serious droughts and water shortages
Food - virtually no hunger	Food - 1 billion people (20% world population) – not enough food
Malnutrition kills virtually nobody	Malnutrition causes 4 million childhood deaths per year; 40,000 people die every day of starvation, malnutrition, hunger and disease – most of which is preventable
90% of children get secondary education	10% of children get secondary education

Main Economic Groupings

All countries undergo development but they vary in where on the development line they are. They can be linked from primitive to advance development. This is shown in the diagram below:

Countries move along the pathway at varying speeds.

The two main groups are MEDCs (more economically developed countries) and LEDCs (less economically developed countries).

They can also be linked to an Electric Cable which is shown below. The core of the cable is made up from economic growth, technology and enterprise. The strands represent different aspects of the development process. It is important to understand that development is not only about economic progress. 

All images are taken from Global Challenge, A. McNaught & M. Witherick 2005.

What is Globalisation?

My undergraduate degree is in Physical Geography so it has been a while since I have studied any aspect of Human Geography in great detail. As a start, I tought it was best to find out the definition of Globalisation, and where better to find out then BBC Bitesize revision to refresh my memory.

Globalisation is the process by which the world is becomming increasingly interconnected due to the increase of Trade and Cultural Exchange. Globalistion has in turn increased the production of goods and services and has made a lot of once National firms, now Multinational Companies.

Globalisation has had the following results:

• Trade between countries
• Greater dependance on the global economy
• Helps companies operate in more than one country
• Freeer movement of goods and services
• Recognition of multinational companies such as Starbucks in LEDC's

Getting Started

Well, this is my first post... Ever! Over the next few weeks as part of my Pre PGCE work I will be investigating and developing my understanding of Globalisation and passing my findings onto you. Enjoy, lets see what I can find out...