Corporate connections
- Created by: Joseph Timoney-Smith
- Created on: 14-04-14 13:29
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- Corporate connections
- Corporate colonialism
- the East Indian Company ruled 20% of the worlds population and was probably the first TNC
- The top 200 TNC's account for 25% of the worlds economic activity and employ 1% of the worlds work force
- 6 of the top 10 TNC's originate in the US and make more money in a year than a countries entire GDP
- The top three TNC's are Exxon Mobil (US), Wal-Mart (USA) and Royal Dutch Shell (Netherlands and UK)
- How do TNC's grow?
- Motive
- Horizontal integration - by buying up the competition
- Ford moved from mass-market sales up to up-market sales by acquiring Jaguar, Volvo and Land Rover
- Vertical Integration - by controlling and owning every stage of production from exploration to research through to sales
- Exxon own oil wells, oil tankers, oil refineries and petrol stations, there is no middle-man
- Economies of sale - companies expand production (e.g. Apple computers) to increase efficiency and reduce unit production costs
- Horizontal integration - by buying up the competition
- Means
- Companies invest overseas to boost their market presence or to take advantage of labour and environmental laws
- Growing trend in this century has been for TNC's from developing countries to invest overseas
- A kind of Reverse Colonialism is happening where the poorer countries now account for more than 15% of overseas investment
- Companies invest overseas to boost their market presence or to take advantage of labour and environmental laws
- Mobility
- accelerated and cheaper transport - including the use of ever-larger container ships
- accelerated communications systems - using fibre optics, satellite and digital technology
- Production systems that can provide cheap and fast turn around like "just-in-time" production
- Motive
- Searching globally, selling locally
- Criticisms of supermarkets are more to do wit the way that most food in the UK is sourced and sold
- Large supermarkets search the world in order to deliver the best-priced or guaranteed quality foood to their customers
- The bigger the company the bigger its purchasing power is and its ability to control suppliers and prices
- Large supermarkets search the world in order to deliver the best-priced or guaranteed quality foood to their customers
- In the case of fresh food, this means that produce is flwon or shipped from one side of the world to another to supply out-of-season fruit or veg
- As they search for the cheapest food they sometimes expolit the farmers and force the prices down
- Criticisms of supermarkets are more to do wit the way that most food in the UK is sourced and sold
- Searching locally, selling globally
- Land has to be cleared in order to have more farm land to supple the demand that supermarkets require to feed the UK
- But TNC's bring both employment and money into a developing economy
- As well as employment, it gives the workers certain skills that can give them an opputunities to make their own businesses or to better paid companies
- Corporate colonialism
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