Global Corporations and MNCs Quiz
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Questions and Answers

What was the primary reason for the rise of global corporations according to the text?

  • Goldman Sachs created an investment fund targeted at opportunities in the BRIC economies.
  • Corporations are legal entities in the form of a business corporation run by separate and individual owners.
  • BRIC nations were identified as a source of foreign expansion and foreign direct investment opportunities.
  • Corporations were chartered in the early 16th century in countries like England and Holland. (correct)

    • What happened to the Goldman Sachs investment fund that was targeted at the BRIC economies?

  • The fund continued to operate and perform well despite the slowdown in the BRIC economies.
  • The fund was restructured to focus on other emerging markets outside of the BRIC nations.
  • The fund was shut down due to a slowdown in growth prospects for the BRIC economies.
  • The fund was merged with a broader emerging markets fund in 2015. (correct)

    • What is the primary characteristic of a corporation according to the text?

  • A corporation is run by a single owner.
  • A corporation is a legal entity in the form of a business corporation. (correct)
  • A corporation is a non-profit organization.
  • A corporation is a government-owned entity.

    • What is the primary criticism of the BRIC nations mentioned in the text?

    <p>The BRIC nations have experienced a slowdown in growth prospects.</p> Signup and view all the answers

    What is the primary reason for the global expansion of corporations according to the text?

    <p>Promising economies with opportunities for foreign direct investment.</p> Signup and view all the answers

    Which of the following statements best summarizes the impact of global corporations on society according to the text?

    <p>The text does not provide any information on the impact of global corporations on society.</p> Signup and view all the answers

    What is the primary factor that has driven the global expansion of corporations according to the text?

    <p>Promising economies with investment opportunities.</p> Signup and view all the answers

    What was the primary reason for the creation of the Goldman Sachs investment fund targeted at the BRIC economies?

    <p>To capitalize on the growth potential of the BRIC nations.</p> Signup and view all the answers

    What is the primary characteristic of the BRIC nations mentioned in the text?

    <p>Rapidly growing economies.</p> Signup and view all the answers

    What is the primary reason for the slowdown in growth prospects for the BRIC economies mentioned in the text?

    <p>The text does not provide any information on the reasons for the slowdown.</p> Signup and view all the answers

    Study Notes

    Global Corporations Overview

    • Global companies are mainly identified as multinational corporations (MNCs) or transnational corporations (TNCs).
    • These corporations operate in multiple countries, particularly in developing nations, to exploit diverse markets for revenue generation.
    • A MNC/TNC typically has a parent company based in its home country, managing and controlling operations.
    • Subsidiaries are controlled by the parent company and serve to enhance corporate power and market presence.

    Economic and Political Influence

    • MNCs and TNCs can have significant economic and political clout in host countries, sometimes overshadowing local businesses.
    • The presence of large corporations can negatively impact local industries, driving them out of business.
    • Global corporations can shape consumer behavior, influencing purchasing decisions and individual actions.

    Geographic Reach of TNCs

    • TNCs are primarily based in Western Europe, North America, and Japan, with operations that extend worldwide.
    • Notable examples include:
      • ABB, a Swiss electrical engineering firm, operates in 140 countries.
      • Royal Dutch/Shell explores oil in 50 countries, refines in 34, and markets in 100.
      • H.J. Heinz has a presence on six continents.
      • Cargill, the largest grain company in the US, operates in 54 countries.
      • ICI, a British chemical company, has manufacturing in 40 nations.
    • Prominent global brands include Apple, Adidas, BMW, Facebook, Amazon, Microsoft, and Domino’s Pizza.

    Functional Structure of Global Corporations

    • International companies operate solely in their home countries with no foreign investments.
    • Multi-national companies cross the foreign direct investment (FDI) threshold, directly investing in foreign assets (e.g., factories, marketing).
    • Global companies maintain extensive international investments but have a strong headquarters in one primary country.
    • Transnational corporations operate with complexity, investing directly in many countries while balancing cost reduction and local market responsiveness.

    Structural Periods of Globalization

    • Globalization has emerged as a significant and debated aspect of the modern economy.
    • Three structural periods of globalization that facilitated global commodity chains are:
      • Investment-based globalization, characterized by the international reach of vertically integrated TNCs since the late 19th century in industries like oil and mining.
      • This trend extended into the 20th century, impacting agriculture and automotive sectors.

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    Description

    Test your knowledge on multi-national corporations (MNCs) and transnational corporations (TNCs) that operate in multiple countries to reach different markets. Learn about the structure, activities, and organization of global companies.

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