2.
3 a) One case study of TNC operating in Pakistan (Global Structure and networks)
Globalization,
including b) The benefits and challenges of TNCs for the people and government of
Transnational Pakistan
corporation can
cause rapid c) The impact of globalization on Pakistan (International Transport and
change for communication, improvements, spread of global culture): are they winners of
economies such loser’s
as Pakistan
Globalization refers to the increasing interconnectedness and interdependence of the world's
economies, cultures, and populations, driven by international trade, investment, technology, and the
exchange of information. It has accelerated in recent decades due to advancements in transportation,
communication, and digital technology.
Key Aspects of Globalization
1. Economic Globalization – Expansion of international trade, multinational corporations,
outsourcing, and global supply chains.
2. Cultural Globalization – Spread of ideas, values, languages, entertainment, and lifestyles across
borders.
3. Political Globalization – Growth of international organizations (e.g., UN, WTO, IMF) and global
governance structures.
4. Technological Globalization – Rapid exchange of information, digital connectivity, and
innovations that link people worldwide.
5. Environmental Globalization – Shared global challenges such as climate change, biodiversity
loss, and sustainable development efforts.
Pros of Globalization
✅ Increased economic growth and job opportunities
✅ Greater access to goods, services, and technology
✅ Cultural exchange and global collaboration
✅ Improved international relations and cooperation
Cons of Globalization
❌ Widening income inequality and exploitation of labor
❌ Cultural homogenization and loss of local traditions
❌ Environmental degradation due to industrial expansion
❌ Vulnerability to global financial crises and pandemics
Transnational Corporations (TNCs)
Transnational Corporations (TNCs) are large companies that operate in multiple countries, with
headquarters in one nation and branches, subsidiaries, or production units in others. They play a key role
in globalization by driving international trade, investment, and technology transfer
Transnational Corporations (TNCs) in Pakistan
Pakistan hosts several TNCs across different industries, playing a significant role in the country's
economy. These companies contribute through foreign direct investment (FDI), job creation, technology
transfer, and industrial growth.
Major TNCs Operating in Pakistan
1. Technology & Telecommunications
● Samsung – Manufactures and sells smartphones, electronics, and appliances.
● Huawei – Provides telecom infrastructure and mobile devices.
● Microsoft – Supplies software and cloud services.
● Google – Expanding digital services, including Google Pay and YouTube offices.
2. Automobile Industry
● Toyota Indus Motors – Assembles and sells Toyota vehicles in Pakistan.
● Honda Atlas – Produces and markets Honda cars and motorcycles.
● Suzuki Pakistan – A leading manufacturer of affordable cars and bikes.
3. Consumer Goods & Retail
● Unilever Pakistan – Produces household products (e.g., Lipton, Surf Excel, Lux).
● Nestlé Pakistan – Largest food and beverage company (e.g., Milkpak, Nescafé, Maggi).
● Procter & Gamble (P&G) – Manufactures hygiene and beauty products (e.g., Pampers, Ariel,
Head & Shoulders).
4. Oil, Gas & Energy
● Shell Pakistan – Supplies fuel, lubricants, and petroleum products.
● British Petroleum (BP) – Operated in Pakistan’s energy sector before divesting.
● ExxonMobil – Invests in LNG and energy infrastructure.
5. Banking & Finance
● Standard Chartered Bank – Provides banking and financial services.
● HSBC (Limited Presence) – Previously operated but scaled down operations.
● Visa & Mastercard – Facilitates digital payments and financial transactions.
6. Pharmaceuticals & Healthcare
● GlaxoSmithKline (GSK) – Leading pharmaceutical company in Pakistan.
● Pfizer – Manufactures and distributes medicines and vaccines.
● Novartis – Provides healthcare solutions and generic medicines.
Impact of TNCs in Pakistan
✅ Advantages:
● Economic Growth: Boosts GDP and employment opportunities.
● Technology Transfer: Enhances innovation and skills in industries.
● Foreign Investment: Encourages infrastructure and industrial development.
● Product Availability: Improves access to high-quality goods and services.
❌ Disadvantages:
● Profit Repatriation: TNCs send profits back to headquarters, limiting local reinvestment.
● Labor Exploitation: Some industries may offer low wages and poor working conditions.
● Environmental Concerns: Industrial operations contribute to pollution and resource depletion.
● Local Business Competition: Small businesses struggle to compete with TNCs’ resources.
Transnational Corporations (TNCs) Multinational Companies (MNCs)
Decision-Making: - Decentralized – subsidiaries Centralized – major decisions come from the
operate independently and adapt to local headquarters.
markets.
Global Strategy: - Focuses on global integration Expands from the home country to foreign
while adapting to local conditions. markets with less local adaptation.
Example of Operations: - A TNC may develop An MNC may sell the same product in multiple
different products and marketing strategies for countries with minor adjustments.
different countries.
Degree of Control: - Less control from More control from headquarters; less flexibility
headquarters; more local autonomy. for local branches.
Examples: - Unilever, Nestlé, Apple – They adapt McDonald's, Toyota, Coca-Cola – They maintain a
products and marketing to different countries. strong brand identity and operate under a single
corporate strategy.
Benefits of TNCs for development
● More Investment
● Create more jobs
● For local businesses to help parts of TNC operations
● Increased opportunities for women, which promotes gender equality
● Encouragement of international trade - opening new markets should increase economic growth.
● Improvement of educational outcomes as TNCs requires skilled workers.
Disadvantages of transnational corporations: dependency theory and TNCs
Dependency theories argue that TNCs only exploit workers and exploit developing nations' natural
resources. TNCs (and more widely, capitalism's) pursuit of profit dehumanizes the world around them.
Joel Bakan (2005) argues: Transnational corporations exercise power without responsibility
Criticisms of TNCs
1. The exploitation of workers - their conditions are often poor, unsafe, and they work for long hours
with little pay.
2. Ecological damage - the willful destruction of the environment
3. Removal of indigenous people - Shell in Nigeria, OceanaGold in the Philippines.
4. Human rights abuses - 100,000 people sought medical treatment after toxic waste was left around the
city of Abidjan,
5. Little loyalty to countries - the 'race to the bottom' means TNCs will move when labour costs are
cheaper elsewhere.
6. Misleading consumers - Think 'greenwashing'.
Transnational Corporations – Key Takeaways
● TNCs are businesses that have a global reach: they operate around the world and are responsible
for 80 percent of global trade.
● The large size of TNCs makes them extremely powerful in negotiations with nation-states. This
often means reduced tax rates, low wages for employees, and poor workers' rights. There is a
'race to the bottom' to attract the investment of TNCs.
● The role of TNCs in development depends on the development theory used to evaluate them.
These are modernisation theory, neoliberalism, and dependency theory.
● Modernisation theory and neoliberalism view TNCs as a positive force and instrumental in
development strategies.
● Dependency theory views TNCs as exploitative, unethical, and immoral.
● The size of TNCs makes them almost unassailable. Fines are disproportionate to their revenue,
blame is passed around, and the threat of leaving keeps governments amenable to the wants of
the TNC.
