4.4

Question 1

impact of MNCs (locally)

Answer 1

• generate jobs
• opportunity for development of skills
• increased wages and working conditions
• increased demand for labour= more competition for skilled workers
• infrastructure
• social enterprise

Question 2

impact of MNCs (internationally)

Answer 2

• FDI flows
• technology and skill transfer
• consumer benefits
• culture
• transfer pricing

Question 3

how do MNCs impact FDI?

Answer 3

• leads to spending in the economy,
• creates jobs,
• lowers level of unemployment

Question 4

how do MNCs impact technology and skill transfer?

Answer 4

• train/develop knowledge and skills

- may develop local industries and improve competitiveness

Question 5

what benefits do MNCs bring to consumers?

Answer 5

• lower prices
• more choice
• improved quality
• better living standard

Question 6

what is the impact of MNCs on transfer pricing?

Answer 6

• an MNC will ensure it is selling its products through a country with the lowest tax levels
• often operate across countries

Question 7

impact of increased global ethics?

Answer 7

• greater pressure to act ethically, but greater scope to break ethical codes
• whats considered ethically acceptable in one country may not in another

Question 8

global ethics and stakeholders: governments and NGOs:

Answer 8

• will place pressure on MNCs to ensure they pay correct levels of tax

Question 9

global ethics and stakeholders: shareholder:

Answer 9

• seek the greatest return on their investment and profit maximisation

Question 10

global ethics and stakeholders: customers:

Answer 10

• increasingly conscious of where their products come from, focus on ethical sources

Question 11

global ethics and stakeholders: communities:

Answer 11

• negative impacts such as pollution, cause bad publicity

Question 12

ethical business practices may relate to:

Answer 12

• acceptable pay levels: ‘living wage’
• suitable working conditions
• human rights, no inhumane treatment

Question 13

environmental considerations:

Answer 13

• Some legislation’s don’t exist is LEDCs
• Legislation on how businesses dispose of and manage waste may also not be enforced rigorously in some countries
• can impact costs and conflict with profit for some MNCs

Question 14

supply chain considerations:

Answer 14

• Difficult to know if workers have been exploited somewhere down the supply chain, e.g. use of child labour
• Makes it easier for MNCs to hide unethical behaviour

Question 15

unethical marketing practices may include:

Answer 15

• misleading labelling/packaging

- false claims in advertising

Question 16

what are different influences on MNCs?

Answer 16

• political influence
• social media
• legal controls
• pressure groups
• taxation policies