1. Transnational Companies.
Transnational companies ( TNCs) or multinational companies ( MNCs) are big.
There are many of them and they operate in more than one country around the world. They have headquarters in one country and offices and factories in others.

2. These are the top five transnational companies by income in the world.
What do they make?

3. Total annual income for country
Rank
Company HQ
Industry
Revenue
$bn 1
Exxon-Mobil
USA
Oil
377 2
Wal-Mart
Retailing
351 3 BP UK
318 4
Shell
UK/
Netherlands
274 5
General Motors
Cars and vehicles
207
Annual turnover for top five transnational companies.
Compare the income of the top five transnational companies with the countries listed in the table below. What do you notice?
Country
Total annual income for country
GDP ( $bn)
Sweden
444
Greece
360
South Africa
277
Malaysia
180
Annual income ( GDP) of selected countries.

4. To sell inside trade barriers
To be close to markets
To find cheap labour
REASONS
FOR
GOING
GLOBAL
To sell inside trade barriers
To spread industrial risks
To take advantage of incentives

5. Transnational Companies such as General Motors bring advantages and disadvantages to the countries where they locate. Sort the statements into advantages and disadvantages of transnational companies for host countries.

6. Advantages and disadvantages of TNC’s for host countries.
Brings work to the country and uses local labour
Mechanisation reduces the size of the labour force
Local labour force usually poorly paid
Very few local skilled workers employed
Prestige value
Local workforce receives a guaranteed income
Most of the profits go overseas (outflow of wealth)
Improvements in roads, airports and services
Improves levels of education and technical skill of the people
Numbers employed small in comparison with amount of investment
Increased Gross Domestic Product/personal income can lead to an increase demand for consumer goods and the growth of new industries
GNP grows less quickly than that of the parent company’s HQ, widening the gap between developed and developing countries
Big schemes can increase national debt
Companies provide expensive machinery and modern technology
Money possibly better spent on improving housing, diet and sanitation
Decisions are made outside the country, and company could pull out at any time
Brings welcome investment and foreign currency to the country
Leads to the development of mineral wealth and new energy resources
Some improvement in standards or production, health control, and recently environment control
Insufficient attention to health and safety factors and the protection of the environment
Minerals are often exported rather than manufactured and energy costs may lead to a national debt
Widens economic base of country
Advantages and disadvantages of TNC’s for host countries.

7. This map shows the numbers employed by General Motors around the world
This map shows the numbers employed by General Motors around the world. It has its headquarters in Detroit USA but has factories around the world.

8. What reason is given by General Motors for the closure of the car assembly plant at Luton.
Complete the table below to show the economic and social effects the loss of jobs at the Vauxhall factory might have had on the Luton area.
Economic Effects
Of the closure
Social Effects of the closure

9. Transnational companies ( TNCs) affect the countries where
they locate their factories. Choose a TNC you have studied.
Explain the advantages and disadvantages the TNC has
for a country or countries where it has factories.
( 8 marks )