hi everyone it is 4.4 Global Industries and companies this is the last of the four videos for Team Four theme four only has four units theme three has six to compensate for that this one only has three topics as well it will be another fairly short one as as 4.3 was just because there isn't a great deal of new content here it's more just kind of making sure we get a summary of a few things that we've studied in theme four and also there's a little bit of a link there Global Ethics a little bit of a link to what we covered in theme three when we study ethics the first part of this unit is 4.14.1 which is the impact of mncs so we need to understand what an MNC is an MNC is a multinational corporation and a multinational corporation is a company that has operations in multiple countries it has to be operations as well if you have all of your business based in the United Kingdom but you export online to France that doesn't make you a multinational corporation now we have to understand the impact that mncs have on the economy and this list is both good and bad I'm gonna diversify from the kind of standard blue and orange here by doing a list of things in red and a list of things in green to suggest the positives and the negatives I'm pretty sure that's probably obvious but I decided to explain it anyway so positives first it creates jobs a multinational corporation joining a country can create work can therefore potentially lead to increased incomes in the area these jobs are typically higher paid jobs because obviously the mnc's have more money behind them that they're able to provide work at a higher wage rate and they would do this to potentially attract workers from other businesses in the domestic Market there's also a bunch of transfers the first of which is skills so if a multinational corporation joins a new country they are going to take with them certain levels of training certain levels of equipment that potentially could lead to higher levels of skills for employees and potential employees in the country that's receiving the MNC there's also technology transfer so you can imagine that when Microsoft first made their move into Africa they took with them technology that they had been operating with in America rather than just using the technology that was available to them in Africa of course this leads to higher levels faster technological growth in these countries than the existing the the prior countries the home countries of these businesses experienced so this technology transfer and this skills transfer should lead to higher levels of Standards there's also a potential impact on local businesses that could be positive if for example if a business builds a new car manufacturing facility in a area that doesn't have a big manufacturing facility it could create other local businesses it could create suppliers it could create catering firms security firms a variety of businesses could set up to provide services or maybe even just cafes and supermarkets and schools to provide kind of amenities to the local business especially if it's one that employs a large amount of employees generally speaking we should see an increase in standards because of all of these things we should see an increase in working conditions businesses from mncs that maybe have higher levels of of um of legislation that lead to higher levels of working conditions and potentially high levels of lead of legislation that lead to better care for the environment in theory you would like to believe that they would take those high standards with them we'll talk about this in a minute about how this isn't necessarily always the case but that's generally what you would expect to see so there are a huge range of positives for mncs especially if the MNC is in an industry that that country doesn't already have so like I mentioned my car factory if that area of the country doesn't existing have an existing car factory that potentially is going to be an overwhelmingly positive impact but there are some negatives as well one is wage inflation so we talked about higher paid jobs from mnc's well if I own a local business and suddenly an MNC has higher wages down the road I potentially am at risk of losing my employees unless I pay higher wages and so we could see wage inflation because of that there is also increased competition for local firms if there are local firms that operate in the same market and that potentially could be a negative because I'm willing to bet that the local firms find it much more difficult to price compete against an MNC that is able to benefit from huge levels of economies of scale and what have you there's also the impact on culture and I tell my students this all the time but when I I would really like to go to Italy Italy is I've been before when I was a kid I'd like to go again as an adult Italian food is my favorite food and if I go to Italy I want to walk down authentic Italian streets I don't really want to see a McDonald's because you can go to any country and see and well you can go anywhere in the UK and see a McDonald's and there's obviously the worry that having more big multinational corporations dilutes the individual culture of different different countries and I remember going to Copenhagen and being in the town center and just seeing a bunch of a bunch of shops that I could have seen in in London and it just disappointed me slightly but I understand it you know and I understand a lot of these businesses that I see in London aren't even necessarily British by by formation and so we're seeing it in the UK as well but the there is the impact on cultural on on cultures within these countries being diluted because we're so used to seeing so many mnc's everywhere they also don't necessarily have to care for the community of the environment especially if it's not their home country they may not have any kind of emotional attire emotional investment and therefore may make some decisions that aren't necessarily the best for the community or for the environment that links really nicely to this next topic which is Global Ethics we're going to look at a few different areas where ethics are a big factor you'll have studied ethics in theme three ethics is different on a global scale because there are certain issues that arise when we think about Global Ethics that maybe don't necessarily arise when we think about ethics within one domestic Market the first is paying working conditions so there's a question here and it's a complicated one but is paying lower wages in other countries unethical if those wages are at local levels if we go to another country to save money on our production costs and we pay the staff in the new country a fifth of what we paid the staff in our previous country that's not necessarily unethical if those wages for those workers are fair wages for their work if it provides them a good level of income and a good level of work but the problem here is sometimes when we think about working conditions do businesses lower their standards when they get the chance to because of the lower legislation standards we talked earlier about how we'd expect to see an increase in standards because they'd bring positive work conditions with them there's no guarantee that that's the case a lot of businesses will do what they need to do by law and no more because they're trying to you know squeeze every bit of profit out of the business we also have the environment which we've mentioned in the negative section there for example this could be emissions this could be waste disposal these things are obviously going to have a negative impact on an environment of a different country a more Global country we also see some some examples of over extraction of resources so this could be natural resources especially ones that aren't sustainable or even resources that are sustainable but aren't being used in a sustainable manner we can see an over extraction of resources and to the point where sometimes we've seen business examples where they have used a resource and when they've run out of that resource they've just kind of moved on to other countries and and all the benefits you'd get from the MNC are then ended you know the equation of jobs and what have you we also have to consider the supply chain and there's a lot of considerations within the supply chain and there's a lot of ethical questions within the supply chain not least slave and child labor there's plenty of stories of in particular businesses taking advantage of Africa in terms of child labor in terms of slave labor I read a story recently in the news about tea companies and a tea estate in I think it was Nairobi or Kenya it may have been even been both actually that had seen huge uh controversies around the treatment of workers and the exploitation of workers in the supply chain so we do see this and we see this for a few reasons we see this due to certainly levels of poverty in these countries meaning that workers are desperate for jobs and so but but also lower levels of of workers rights meaning that it's easier for businesses to get away with with these things as well and so there's a level of responsibility that businesses Within These Supply chains should take for the actions of other businesses in their supply chain but I guess that's the question and that's the ethical question I would ask my students is are Nestle responsible for the treatment of workers on their on farms that Supply them or is it the farmers the the businesses that own the Farms their states that are responsible or is it the local government that's responsible or are they all responsible it's a it's a it's certainly a big big question foreign which leads us to 4.4.3 the big question here is why do multinational corporations need to be controlled well I can point to two reasons right now there's that giant list of negative impacts that they have on the economy and we've got all of those different ethical issues that we've raised as well so why does it need to be controlled well they need to be controlled because they do potentially have a negative impact on different countries and because they do sometimes Act unethically so how do they do this and how can we potentially control multinational corporations they sometimes seek to to have political influence and this could be for a few reasons one could be to get a tax break we talked about this when we talked about um I think I used Apple and Ireland as the example in one of the other videos from theme four they could look to gain a tax break they could like to gain access to local natural resources and you know governments will do what they can to get investment in their country to create jobs in their country so they may fall um they may decide to take advantage of these businesses offers and and provide these tax breaks and access to these natural resources there's a few issues in terms of the legal control of things tax laws are quite complicated country to Country for example we certainly in the UK don't have a very good handle on businesses that are for example foreign businesses but do operate in the UK how much tax they should pay in the UK we clearly don't have a handle on this because there are plenty of businesses that manage to avoid tax um legally but through through loopholes and so there's issues there taxation used to be the calculation of tax used to be in the statement of um statement of comprehensive income in this specification and they removed the the need for calculating taxation there and I think one of the I don't know certain no one's necessarily told me this but I might be like I've read it somewhere that one of the reasons for this was it actually became quite complicated when businesses are making tax and certainly when you think about global businesses it becomes quite confusing in terms of tax in terms of where they pay their tax we also have issues with with takeover legislation as well so for example if a British business takes over American business or vice versa you've got two sets of take all the legislation there that need to be considered and so that can be quite complicated as well especially if certain countries have different standards that they would accept so what can we do well pressure groups do a lot of this they will shine quite a highlight on a lot of the issues of multinational corporations you'll have heard a lot of pressure groups that will be aiming to do this they're just trying kind of raise an awareness that not all action that businesses take is ethical and social media is a really positive way of well one of the positives of social media there's plenty of negatives about social media but one of the big positives is it allows us to spread these these stories and spread the awareness of these issues um really really effectively and so we've seen examples of businesses potentially being boycotted rightly or wrongly depending on your opinion um based on a variety of ethical issues and so one of the potential benefits of social media is it allows us to spread those messages much much easier than we perhaps would have been able to before that is but the key thing there the key concept is is that it's about making sure we have a level of control over these mnc's because they can be so positive for economies but they also can potentially be negative as well and what we want is more of the positive and less of the negative that covers theme for have a look through the resources all of theme one and four are up which means that you have everything you need to be preparing for paper one if you're looking for a bit of a sort of General summary video for paper one there is a preparing for paper one uh video on the channel as well that's well worth it look that looks at the links between theme one and theme three sorry team one and theme four obviously other than the obvious ones that we've got in in 4.3 in particular have a look at the resources there's some exam question practice um there's a grid of exam question practice in there that you can have a look at there's also a bunch of Quizlet links for key term knowledge and links a variety of links to other playlists and channels and parts of this channel hopefully you found this really really useful it's obviously worth saying that none of these videos are super comprehensive they're just there to kind of give you a brief overview but hopefully it gives you a bit of a jogs the memory potentially before an assessment or an exam and gives you some things to potentially think about and maybe go away and study in a bit more detail if you have any questions pop them in the comments and uh I'll see you soon thank you