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Explain, using examples, the impact of Transnational companies in Ireland. - Leaving Cert Business - Question B - 2004
Question B
Explain, using examples, the impact of Transnational companies in Ireland.
Worked Solution & Example Answer:Explain, using examples, the impact of Transnational companies in Ireland. - Leaving Cert Business - Question B - 2004
Step 1
Explain the role of Transnational companies
Answer
Transnational companies (TNCs) are organizations that operate across national borders and maintain production or service facilities in more than one country. They play a vital role in the global economy and significantly impact local economies, such as that of Ireland.
TNCs, such as Nestlé, Siemens, and Coca-Cola, often establish operations in countries where they can optimize resources, including labor, taxes, and local markets. This leads to increased employment opportunities and a boost in local economic activity.
Step 2
Discuss examples of TNC impacts in Ireland
Answer
In Ireland, TNCs have had substantial effects on the economy. For instance, the presence of major tech companies like Google and Facebook has transformed the job market, as they hire thousands of employees. Additionally, these companies contribute significantly to the country's Gross National Product (GNP).
Another example is the pharmaceutical industry, where companies like Pfizer and Johnson & Johnson have set up manufacturing plants, improving local employment rates and contributing to exports.
Step 3
Evaluate the benefits of TNCs in Ireland's economy
Answer
The benefits of TNCs in Ireland include job creation, the infusion of foreign direct investment, and the enhancement of skill levels among the workforce. With TNCs establishing manufacturing and service bases in Ireland, the country enjoys increased economic stability.
Moreover, TNCs often engage with local suppliers, fostering regional development and strengthening local economies through partnerships and contracts.
Step 4
Consider potential drawbacks of TNCs
Answer
Despite their benefits, TNCs can also pose challenges. For instance, reliance on a few major companies can lead to economic volatility if these businesses decide to relocate. Additionally, TNCs may prioritize profits over community development, potentially leading to situations where local needs are overlooked in favor of corporate objectives.
Furthermore, the competitive nature of TNCs can threaten smaller local businesses, as they may struggle to compete against the efficiency and scale of larger corporations.