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The Nike shoes that you wear to school in the morning, the McDonald burger that you eat for lunch, the Apple itouch that you use to listen to music, the Nestle bottle water that you drink when you are thirsty, and the Sony TV that you watch every night, those brands all belong to something called transnational corporations or multinational corporations.
Transnational corporations are corporations that have their headquarters in one country, and have companies in more than one foreign countries. The first transnational opened in the early 20th centuray. There are three types of transnational corporations:
Horizontally integrated: factories in different countries making the same product. A transnational corporation that is horizontally integrated is McDonald.
Vertically integrated: factories in certain countries making products that act as the input to the goods that are made in factories in other countries.A transnational corporation that is vertically integrated is Addis.
Diversified: factories in different countries making products that are not horizontally nor vertically integrated. A transnational corporation that is diversified is Microsoft.
One way that the transnational corporation reduce their cost and make huge profits is outsourcing which means that they set up factories to produce those goods in developing countries where labour is cheap. Once a transnational corporation opens a company in a country, it provides jobs for the people. Countries like South Korea and India reduced their poverty rate. So governments of varies countries are lowering their trade barriers to attract those corporation and causes those corporation to be even more powerful than the government. Lower trade barriers mean that the wages are lowered, cut the cost of education and health care in order to provide money to help the transnational corporation to set-up, and lead to issues like child labour, and environmental issues.
There is a video about the cause of transnational corporations:
Transnational corporation and human rights:
Because the transnational corporations are more powerful than the government, they tell government to allow sweatshop labour and child labour and change laws or policies that favours them. Some oil and mineral corporations in Africa even hire military to kill worker who form an union or protest because of the low wages. And workers in factories making goods for transnational corporations to sell usually work in horrible environment which might cause serious health issues. And if a country tries to increase the wages, the corporation would threaten the developing country by leaving and moving to another country. So it impossible for workers to gain workers rights.
Transnational corporation and environment:
Transnational corporation destroy forest for land and resource, pollutes ground water, cause oil spills that pollutes water and killing organisms in the water. Here is a video of victims of the Nigeria oil spill talking about the effects of the oil spill:
From 1970 to 1995 the numbers of transnational corporations went up 40,000 from 7,000. And here is a table with world's biggest transnational corporations in 1996:
Table 2:World’s Leading Transnational Corporations by Foreign Assets, 1996 (billions of US$)
Shell, Royal Dutch
Asea Brown Boveri
Alcatel Alsthom Cie
Table from: see bibliography
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