Benefits and problems of TNC’s operating in a LEDC.
TNC is a company that sells its products internationally and globally. It normally makes its products in LEDCs whereas its branches are in MEDCs. Examples of TNCs are: Nestle, Topshop, Sony, Coca-Cola and Nike.
When a TNC sets up its company in a LEDC it can benefit that area significantly. Firstly, in order to import its resources, machinery and materials etc. and to successfully run their company they will have to improve the infrastructure of the town e.g.; the transport links and telecommunications, in some cases they will also build new, large airports or expand on the already existing airport so they can fly in large amounts of stock. They improve roads in order for them to be able to transport their materials quickly and efficiently with ease once they have landed. This means that the people living in the close vicinity will have better access to other villages and cities via the more advanced transport network that have been created. The area could also benefit due to the improvement of their airport because the amount of tourists visiting each year would most likely increase as more flights can now land each year and more people will have access to the area, this would boost the community’s economy and therefore give the people living in it, especially business owners, a better standard of living.
Furthermore when a large company trans-national company is set up in a LEDC they offer hundreds of jobs to people who were once un-employed, they also sometimes provide their workforce with healthcare, accommodation and extra training. This means people can afford food and shelter for their families and can now work in considerably safe conditions, enabling them to improve their lives and to gain new skills for example - working various types of machinery such as sewing machines, which they can use for other jobs in later life. Also the money earned by the local people goes straight into the...