Apple TNC materials- Global governance PDF

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Apple TNC materials- Global governance Topic...

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Background information

An example of a TNC and its impacts upon the countries that it operates – Apple Inc.

Headquarters location:

Silicon Valley is an example of an agglomeration – Why is this?

Products it sells: Number of employees:

Use pages 309+ AQA Alevel Hodder

How many countries does Apple Inc. have stores in? Among the Apple-less countries are Syria, North Korea, Sudan and Cuba, which face trade sanctions from the United States. Target audience of products:

A special economic zone (SEZ) is an area in which the business and trade laws are different from the rest of the country. SEZs are located within a country's national borders, and their aims include increased trade balance, employment, increased investment, job creation and effective administration. How does this relate to Apple?

Target market area: Examples of number one records for Apple Inc:

Spatial organisation

Positive impacts upon:

Negative impacts upon:

Type of employment in origin country USA:

USA:

USA:

Name of company that manufactures for Apple Inc. in China:

Ireland:

Ireland:

China:

China:

Type of employment in China:

‘Transnational corporations (TNCs) are the most significant factor in creating unequal flows of people and money within global systems.’ With reference to a TNC, assess the extent to which you agree with this statement. [20 marks] Transnational corporations are companies that operate in at least two countries with a headquarters based in one country and business operations in a large number of other countries. Due to this defining international characteristic they will by their nature, cause unequal flows of people and money. To a major extent, it can be argued that TNC’s such as Apple Inc. play a significant role in creating unequal flow of people. For example Apple Inc. has it’s headquarter in Cuperto, northern California, here it employs 12,000 staff. These employees will oversee the global management the Apple brand; they will be involved in highly skilled employment, which includes research and development and marketing of their products. This type of quaternary sector labour is attributed to high salaries and therefore encourages inflows of labour from other parts of the US and the international community. Apple also has a European HQ based in Hollyhill, Cork, R. of Ireland. Here 4000 skilled workers are directly employed and 2500 additional employees participate in skilled work that offers excellent opportunities of pay. Here once again these opportunities encourage inflows of labour of skilled workers who undertake this kind of work. Many of these workers come from Ireland however, a large proportion of these workers come from other EU nations, which in turn can further encourage the ‘Brain drain’ of skilled labour from other areas. Despite this, it can be noted that few of these workers come from outside the EU due to restrictions that are caused in the free movement of labour from outside the trade bloc. As well as encouraging unequal flows of highly skilled labour to the HIC’s, TNC’s also encourage unequal flows of labour towards the manufacturing plants. For example, Apple Inc. sub-contracts the manufacturing of their products to Foxconn which is located within a Special Economic Zone (SEZ) within Shenzen, South China. Here Foxconn employees 400,000 semi-skilled secondary workers who earn higher than average wages ($200 per month) for this part of China. Although these wages are relatively poor compared to wages gained by employees in HIC’s, these wages are high enough by Chinese standards to encourage flows of labour towards them, in many NEE’s this can be a major cause of rural to urban migration and consequently urbanisation. Therefore, it can be argued that TNC’s do encourage the unequal flows of skilled and semi-skilled labour. TNC’s by their nature also have a wealth of opportunity in deciding where to locate their branches and therefore it can be argued that they play a key role in determining flows of people. TNC’s also cause unequal flows of capital (money). This is because they promote economic growth by providing foreign direct investment into NEE’s via Export Processing Zones such as the Maquiladoras or SEZ’s such as Shenzen. This influx of money can stimulate economic growth and in turn cause the positive multiplier effect and encourage further investment and economic development and forms agglomerations. This will occur in urban areas with good infrastructure, leading to inequality in wealth in relation to rural areas (affecting the GINI index). However, despite the outflow of FDI to the EPZ’s and SEZ’s, the overall dominant flow of capital comes in the nature of profits returning to the origin country of the TNC’s. Overall, with the growth of neoliberal policy, which has been encouraged by the World Trade Organisation; has allowed TNC’s to have nearly free reign over influencing unequal flows of people and capital. However, since the financial crisis of 2008, some trade blocs such as NAFTA and the European Union have become more cautious and have adopted greater protectionism in the form of increased tariffs. This has subsequently caused regionalism in flows of capital and labour. Therefore, in conclusion I believe TNC’s do play a dominant role in causing unequal flows of people and capital; however, other aspects of global systems such as trade blocs also have a key determining influence....