Politics

Study Notes

Transnational and Multinational Corporations

Level:
A Level
Board:
Edexcel, IB

A Trans-National Corporation (TNC) or Multi-National Corporation MNC is a business that is based or registered in one country but has outlets/ affiliates or does business in other countries.

Globalisation is one of the major reasons for the growth in TNCs. A number of businesses in order to grow and develop have had to take on a global or international perspective. In addition, TNCs have also caused further globalisation – a two way process.

Many TNCs are based in more economically developed countries such as the UK and USA, with Foreign Direct Investment coming from similar countries. However, an increasing number of TNCs are based in LDCs, for example India’s Tata or China’s Alibaba.

There are a number of reasons why a TNC might want to set up in a country.

These include: cheap labour, cheap raw materials, good transportation links, a business friendly government (ones which adopt policies which encourage business develop and growth such as low rates of corporation tax), exploitable property rights and so on.

There are a number of examples of TNCs which instantly recognisable. McDonalds has a presence in over 119 countries with approximately 30, 000 restaurants. Likewise there are over 21,000 Starbucks outlets worldwide (2014 figures) operating in over 60 different countries.

The table below show the top 10 TNCs as defined by their global, worldwide assets (source: UNCTAD).


Rank

Corporation

Country

Industry

Foreign Assets (in Millions of dollars)

Total Assets (in Millions of dollars)

1

General Electric Co

United States

Electrical & electronic equipment

331 160

656 560

2

Royal Dutch Shell plc.

United Kingdom

Petroleum expl./ref./distr.

301 898

357 512

3

Toyota Motor Corporation

Japan

Motor vehicles

274 380

403 088

4

Exxon Mobil Corporation

United States

Petroleum expl./ref./distr.

231 033

346 808

5

Total SA

France

Petroleum expl./ref./distr.

226 717

238 870

6

BP plc

United Kingdom

Petroleum expl./ref./distr.

202 899

305 690

7

Vodafone Group Plc.

United Kingdom

Telecommunications

182 837

202 763

8

Volkswagen Group

Germany

Motor vehicles

176 656

446 555

9

Chevron Corporation

United States

Petroleum expl./ref./distr.

175 736

253 753

10

Eni SpA

Italy

Petroleum expl./ref./distr.

141 021

190 125

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