Lesson video

Hello, my name's Ms. Gilyeat and I'm your geography teacher for today.

In today's lesson, we're going to be learning about transnational corporations, which is lesson eight of the Globalisation topic.

We've got loads of interesting things to learn about, so let's get going.

So, your lesson outcome for today is that you can explain what a transnational corporation is and describe some of their activities in different countries.

So, we've got four keywords for today's lesson.

So, globalisation is the links and interdependencies between countries all around the world.

a TNC is a transnational corporation, which are large businesses that operate in at least two countries.

Glocalization is when TNCs adapt their product or service to suit the local market better.

And culture is a way of life customers and behaviours that a group of people share.

So, we've got two learning cycles for the lesson.

So, the first learning cycle is we're gonna learn about what are TNCs.

And for the second learning cycle, we're gonna learn about what is glocalization.

So, let's get going with the first learning cycle, what are TNCs? So, transnational corporations are also known as multinational companies are large businesses that operate in at least two countries.

So, some examples of large TNCs that you might have heard of is McDonald's, H&M, Apple, and Tata.

So, let's check our understanding.

What does TNC stand for? Transformative companies, transnational countries, or transnational cooperations? The answer is C, transnational cooperations, TNCs connect distant people and places.

People worldwide have become familiar with the name of many TNCs.

Now, I want you to even discuss with your partner, if you're working on your own, you could jot down a few ideas.

Do you know of any examples of TNCs? So, companies that you think operate in more than just one country? Did you get a few? Now, TNCs are found in all types of industries, so we're gonna look at some of them.

So, the energy industries such as Shell, banking, for example, HSBC, transport, so for example, Toyota, food and drinks, so for example, Coca-Cola.

So, all of these companies operate in more than just one country of the world.

They are also in manufactured goods.

So, for example, Apple computers, medical science, for example, GlaxoSmithKline, agribusiness, which is large scale farming.

So, Dole food would be an example of a TNC there.

And social media, for example, Facebook.

Now, I want you to think, why do you think a company may choose to open up a branch or a factory in a different country of the world? Okay, so I've got some pictures on the slide here, which might help you think of some of the answers.

Why do you think a company may choose to open up a branch or a factory in a different country of the world? Now, there are actually a few different reasons why a company may choose to operate in another.

So, here are some of the reasons.

So, a company may want to use or make use of natural resources in another country.

So, for example, Shell Oil is a British company, but they've extract a lot of oil from other parts of the world such as Nigeria.

So, they've put themselves in Nigeria to extract the natural resource from that country.

The company wants to grow and reach the global market.

So, it wants to be able to access more people.

Sometimes, countries or companies want to avoid paying higher taxes.

So, they might choose to operate in a country where they don't have to pay as much tax.

In doing so, that they get to keep more of the profit that they make for themselves.

Make use of countries with less strict environmental laws and lower production costs.

So, in lower income countries the wages are often lower, so it costs companies less to employ people.

Now, if we have a look at all of these reasons why a TNC may choose to operate in another country, what can you notice about all of those different reasons? What have they all got in common? So, here's the answer.

So, all of the reasons why a TNC may choose to operate in another country of the world are to do with making money.

So, whether that is by people paying lower wages or avoiding paying higher taxes, TNCs all try to be as profitable as possible.

So, they're wanting to make money, that's their main aim.

Okay, so let's check our understanding.

Why may a company choose to operate in another country? Tick all that apply.

So, A, make use of natural resources in another country, B, avoid paying high taxes, C, to increase the distance goods have to travel, or D, lower production costs.

So, tick all that apply for that question.

Okay, let's check our answers.

So, A, to make use of natural resources, B, to potentially avoid paying taxes, and D, to lower production costs.

Now, companies won't want to increase the distance goods have to travel, because that will cost them more money.

So, a TNCs headquarters are usually located in the country where its business started.

Okay, so when a headquarters is the kind of main offices of the company.

So, that's where the decision making and the planning will go for the company or the business.

So, most TNC headquarters are located in higher income countries such as the USA and the UK, okay? So, if you have a look on the world map that we've got there, the colours that have been shaded in, the darker green, show the higher income countries.

Yeah, so most companies' headquarters will be located there.

When a TNC starts to operate in another country, that country is called a host country.

TNC production usually occurs in middle income or low income countries, okay? So, yes, it might have its headquarters in a higher income countries, but if it moves and branches out into another country, whether that be for production or setting up a branch, often this can be in lower or middle income countries, but that country is called a host country.

They may choose to do this for a number of different reasons.

So, one, there are more relaxed environmental laws in the host country.

Potentially lower labour costs, so it's not having to employ or the cost, the wages that the employees is less and therefore the company can take more money, or there are natural resources to be exploited, okay? So, those are the different reasons why a TNC may choose to set up and operate in another country of the world.

So, here we've got an example of a TNC, Nike, okay? So, our case study example.

So, Nike was established in 1972 and it's a sportswear company.

It's headquarters are located in Beaverton in Oregon, the USA, and that's where the company originated from.

It employs 79,000 people.

Last year in 2024, it made $38 billion.

And for manufacturing it's got over 700 factories in 42 countries of the world.

36% of all of its production takes place in China and Vietnam.

Wow, I think that's quite an astounding fact.

So, here we've got a map that shows all of the countries that Nike operates in.

So, I've got the USA is where the headquarters is located.

So, have a look at that map.

What other countries can you spot that Nike operates in? Let's check our understanding.

Most TNC headquarters are usually located in higher income countries.

Is that true or false? That is true.

And can you tell me why? Because often this is where the company started from.

So, well done, if you got that correct.

Okay, we're moving on to our first task for our lesson.

So, for task A, for question one, you need to write down what does TNC stand for? And for question two, I'd like you to have a go at completing the table to explain why each factor mentioned may lead to a company choosing to operate in another country.

So, less strict environmental laws, lower labour costs, reaching the global market, so consumers from different countries, and to make use of natural resources.

So, you are going to fill in the explanation column of the table to say why a country might therefore choose to start operating in another country, because of those different reasons.

Once you've done that, you're gonna have a go at question three, which is to research an example of a TNC and complete the fact file.

So, you need to give the name of the company, the year it was established, the location of the headquarters, the number of the countries it operates in, and if you could name three, that would be fantastic.

The number of employees and the total revenue for last year, okay? So, you will have to use the internet to have a go at this case study research.

Okay, let's have a look at the answers then.

So, what does TNC stand for? Transnational corporation.

And this is the reason, or this is what your table should look like filled in.

So, if a country or a host country has lesser strict environmental laws, it might kind of entice a country to go there or a company to go there.

So, the reason for that is, if there are less strict environmental laws in a house country, it may mean a company could cut corners and not have to worry about polluting the environment as much, which would save the company money.

So, that's not always a positive thing for the country.

However, it does mean that the company makes more money.

Lower labour costs.

So, if average wages lower in a host country, it costs the company less money to employ workers, reducing production costs.

Reaching the global market.

So, if a company opens another branch in a different country, that means that they can reach a larger market and they sell their product to more people and therefore make more money.

And make use of natural resources.

So, a company may go to a country with lots of useful and desirable natural resources for 'em to access and exploit.

So, it might be worth pausing the video and just double checking your answers for that task.

Okay, so I've put an example of Coca-Cola here for my case study, but obviously, you may have chosen a different one, but here's some interesting facts about Coca-Cola for you.

So, Coca-Cola was established in 1892 in Atlanta, the USA, which is the location of the headquarters.

And it operates in over 200 countries of the world, including Brazil, India, and Turkey.

It employs 79,000 people, and last year it made £47 billion.

Wow.

Okay, let's move on to our second learning cycle, learning about what is glocalization.

Now, glocalization is a combination of two words.

Can you figure out which two words it is? Okay, so it comes from globalisation and local.

So, these two words have been put together.

Now, glocalization is when a TNC adapts their product or service to suit the local market in a country better.

For example, McDonald's has adapted its menu in different countries of the world to align with different cultures.

So, even though you may be very familiar with the McDonald's sign, if you see it in a different country, you might not necessarily have the same menu as you would in the UK, okay? So, here are some examples of what McDonald's sells in different countries of the world.

So, for example, in Mexico you've got McMollettes.

In Brazil, they sell banana oven pie.

In Egypt, they sell McFalafel.

Australia, ham and cheese pockets.

And Thailand, they sell coconut sticky rice pie.

Now, all of those items McDonald's has kind of taken into account the local cuisines there and tried to tailor their menu to the local area.

Okay, let's check our understanding.

So, what is glocalization? A, when TNCs adapt their product or service to suit the local market better, B, when a TNC only operates in a local area, or C, global companies opening up branches in a different country.

So, pause the video and have a go.

Okay, so the answer is A.

So, when TNCs adapt their product or service to suit the local market better.

Well done, if you got that correct.

Companies will also adapt their advertisements to better suit the culture of the market to which they are selling.

This is aimed at helping the company sell more products.

Now, I want you to think, if a TNC came into an area and started advertising a lot, what impact do you think that could have on some of the local businesses? Either chat to the person you sat next to or write some ideas down for yourself.

So, Laura's got a good answer here.

So, it can have a negative effect on smaller local businesses as consumers may choose to buy from TNCs rather than them.

This may mean that they lose money and could potentially shut down.

For example, local coffee shops may get less business, if a new Costa opened.

Laura's absolutely spot on there.

Well done, Laura.

Okay, let's check our understanding.

So, true or false? Glocalization can have a negative effect on local businesses.

That is true.

And can you tell me why? Consumers may choose to buy from the TNCs rather than the local businesses.

Spot on, and that could mean that they potentially shut down.

Okay, we're on to our final task for this lesson.

So, your task is you are going to design your own food item, which will be introduced onto the McDonald's menu, which would best suit the local area where you are from.

So, in your design, I would like you to give the name of the new food item, you're going to draw a picture of it, and have a short caption describing it, and then an explanation of what inspired your design.

So, good luck.

I'm looking forward to listening out for some of your ideas of the new food on the McDonald's menu.

Off you go.

Okay, here's my example list from this.

I'm from Sheffield, so I have introduced or created McPie and peas, okay? So, I'll give you a description here.

So, McPie and peas is a Sheffield-inspired new food item for the McDonald's menu.

It's rich steak and ale centre is complimented with a pot of mushy peas.

Optional sachets of Henderson's Relish are available.

Now, the reason I've chosen this is because Henderson's Relish is a condiment made in Sheffield.

I've got a nice picture of it there.

So, it's quite common for people to get pie and peas in Sheffield, which is why I've introduced this onto the menu.

Now, I can tell you now, if this was introduced to the McDonald's menu, I would definitely be going there.

It might be a good idea to share some of your ideas with your classmates and see what you've all come up with.

Okay, here's a summary for today's lesson.

A TNC is a transnational corporation, a company that can be found all over the world, such as Nike and McDonald's.

TNCs connect distant people and places.

People worldwide become familiar with the names of TNCs.

TNCs may operate in another country for many different reasons.

An example being cheaper labour.

Most TNCs' headquarters are located in higher income countries.

TNCs can adopt glocalization where products and ideas are adapted to local cultures.

Well done.

I thought that was a really interesting lesson.

I'm sure you've done an absolutely fantastic job there.

Right, that's it for me today, but I hope you have a fantastic rest of your day and I'll see you next time.

Bye.