• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

The benefits and harm caused by Transnational Companies.

Extracts from this document...

Introduction

´╗┐Essay Practice ?TNCs bring more benefits than harm to host countries?. To what extent do you agree with this statement? TNCs, or Transnational Companies, refer to large global companies which operate worldwide productions with different functions taking place where it is the most profitable. Over the past decades, globalization has resulted in major technological advancements in transport such as containerization and cargo ships, as well as rapid developments in communications such as the internet. This has brought about the dramatic increase in size of and numbers of TNCs. As more TNCs are being set up in other countries, there have been incidences of both positive and negative impacts on the host countries, which are the countries which the TNCs are present in because of the international agreement between the TNC and the country involved. Over time, it has been noticed that host countries do benefit from TNCs, and these impacts include a more guaranteed income for the local workforce and boosting of the local economy. At the same time, as problems such as exploitation of workers surface, it appears that TNCs bring more harm than benefits to these host countries. ...read more.

Middle

According to Rostow?s Model of Economic Development, if the TNC thrives in the host country, the host country can climb up the ladder of economic development. Without the TNCs? input into the host countries? economies, the host countries, being mostly, LEDCs, will be at Rostow?s 1st stage of economic development where it is characterised by its high levels of labour intensive work and agricultural sector. With TNCs, the host countries receive external help which encourages increasing industrialisation. When the number employed in the agricultural sector declines due to the TNCs? jobs opportunities, there can be self-sustaining growth and high output levels in the host countries. Gradually, the host countries will be able to follow the linear stages of the model, hence reaching a higher economic level of development. Furthermore, when the economic base is widened, other firms and industries are attracted to the host countries. In a similar manner, more jobs are created for the local population while the foreign investment continues to increase. This will lead to expansion of new businesses in the economy, and thus eventually an increase in the general wealth of people and standard of living. ...read more.

Conclusion

They are afraid to tell on their bosses during inspectors for they fear losing their jobs. Also, their bosses pay them extra wages if they present a good image of the company. Secondly, since these workers are extremely desperate for work, they put more priority on the amount of wages they receive rather than the working conditions they are subjected to in their work environment. Hence, it brings about a long-term negative effect to the host countries of the TNCs. The extent to which impacts due to TNCs affecting host countries leans towards the harms rather than benefits. Although more job opportunities are created for the local population in the host countries and overall, lead to a boost in the economy, these benefits of TNCs in host countries have indirectly brought harm to host countries. As more jobs are created for the local population, more people become employed and thus more workers are being exploited. They are hence trapped in a vicious cycle, unable to solve it. Hence, the overriding impact of TNCs in its host countries is the harm brought to it, the exploitation of labour. Therefore, the statement that TNCs bring more benefits than harms to its host countries is also agreeable to a limited extent. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level UK, European & Global Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level UK, European & Global Economics essays

  1. Why are Unions set up?

    Medicare as a system of universal health care must be regarded as a public service and not merely as an insurance programme under which only a limited number of services are available. 7 Notes On Unions, Canadian Labour Congress, Quebec, 1992, P.5 P.5 Pensions - Unions have been consistently negotiated improvements in pension plans.

  2. Many examples of Companies working globally are: Nike, Adidas and other companies which may ...

    Many examples of Companies working globally are: Nike, Adidas and other companies which may not necessarily be in the clothing business. These are usually referred to as TNC's or transnational companies. To simplify, globalisation is the way companies, ideas and people's lifestyles and trade are moving round the world easily and rapidly.

  1. Where does the World Trade Organisation fit in the overall scheme of international public ...

    But is it closer to the Rule of Law in the classical liberal sense set out above? That is the question to which I will return. Before that, however, it is apposite to say something about recent trends in national trade policies, and particularly to flesh out the division of

  2. Comprehensive Anatomy of China

    This region includes Hainan Province, Hainan Island and the southernmost parts of Guangdong and Yunnan Province, as well as the southern Guangxi Zhuang Autonomous Region. Hainan, a special economic zone, is on track to be the national center for pharmacy and is currently expanding into the tourism and tropical research markets.

  1. To what extent and in what ways are the strategies of multinational companies influenced ...

    Instructions with relevance to investment, expansion and main line strategy, i.e. shape and the direction of the enterprise, still lie with the flagship. The regional HQ is decentralised, but to no autonomous level. Their role is to seek intelligence, look for entrepreneurial openings and manage the differences in culture.

  2. Describe how TNCs influence the location of manufacturing industry.

    It will instead be influenced by international rather than domestic factors. TNCs have more complex locational decisions to make. To locate in the UK a company such as Nissan had to consider; the need to be in he EU; competition from other Japanese companies; attitude of the local government; green

  1. 'The growth of the influence of the TNCs represents the emergence of a global ...

    of all countries minus the biggest 10 It can be argued that last twenty years, Transnational have acquired unprecedented economic, financial and political power. Markets and capital globalisation, which has been mostly profitable to these companies, has allowed for further concentration of their capital and production means, creating political situations.

  2. The Blessings and Challenges of Globalization.

    In contrast to those failed policies, certain countries have managed to dramatically improve their living standards by deregulating their domestic economies and opening up to global markets. The Four Tigers of East Asia--Hong Kong, Singapore, Taiwan, and South Korea--are the most prominent examples.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work