Lillian Zhong – Geography 8GREEN

✰ TNC’s research task ✰

TASK ONE: 
1. What does TNC stand for?
TNC stands for a Transnational Corporation
2. In your own words, define a TNC
A Transnational Corporation is usually a large company that has business all over the world.
3. Find 10 examples of a TNC
 Apple  Gucci 

 McDonalds  Adidas 

 Roxy  H & M 

 Nike  Louis Vuitton 

 Prada  Puma

4. What are the two positives associated with TNCs?

Some benefits of TNCs are that there are more job opportunities with all the stores placed
around the world, not only do transnational corporations increase the exportation they
generate revenues to developing countries. With TNCs existing, other companies are
observing their growth and are encouraged to also create more companies over the world.

5. Explain why TNCs can facilitate increased trade between countries

When TNCs are introduced to countries, they increase the dependence of less developed
countries on the richest countries. By moving production to countries with lower standard of
living and wages they can hinder the growth of living standards. 

6. Describe how TNCs can increase connections between places

It is a multinational company and all the stores around the world are connected through the
brand.

7. What are the two negatives associated with TNCs?

TNCs usually exploit cheap labour, although TNCs can bring jobs, technology and inject
capital to low wage countries easily as well as it could be leave easily.

8. What is a sweatshop?
A sweatshop is a factory, most commonly in the fashion industry, where manual workers are
employed to work long hours for extremely low wages. Sweatshops are usually found in
second-world/developing countries such as China, Thailand, and Bangladesh.

9. Describe working conditions in a sweatshop

Working conditions in a sweatshop are extremely poor, people are employed from
developing countries in poor weather conditions and low wages when they are working for
long hours. 

10. What is the link between TNCs and sweatshops?

The link between transnational companies and sweatshops is that when having multiple and
possible hundreds of stores all over the world, it is hard to continue making quality clothing
through quality factories as it costs them money and decreases the profit they make, so
multiple brands use sweatshops as a loophole to not spend as much money on employees
yet still produce quality clothing. Brands such as Nike, H & M, Zara and Uniqlo all use
sweatshops.

TASK TWO: CHOOSE YOUR OWN ADVENTURE

H & M, Hennes & Mauritz AB, is a Swedish clothing company. H & M known for offering
quality fashion at quite affordable prices. They sell clothing from ages from 6 to more than
40s. They sell a variety of children’s clothing in both genders, casual clothing for teenagers,
modern clothing for mature adults, undergarments and even homeware.

The company first started in Västerås, Sweden, in 1947 by Erling Persson. At first, the
company was called Hennes, which means "hers" in Swedish. In 1968, Persson obtained
the building and inventory of a Stockholm hunting equipment store named Mauritz Widforss.
A stock of men's clothing was part of the inventory. This made Persson decide to also sell
men's clothing. He then renamed the store Hennes & Mauritz, which was later shortened to
H&M.

According to The Local, the “Net profit tumbled 22 per cent in its December 2017 to the
November 2018 year to 12.65 billion kronor (€1.2 billion, $1.4 billion) although total sales
were up to five per cent to 210.4 billion kronor.” 

H & M have stores located all over the world, operating in 62 countries such as Cyprus,
Greece, Portugal, Australia, Shanghai, and the United States. They have over 4,500 stores
and as of 2015 employed around 132,000 people. Its headquarters is located in Stockholm,
Sweden. H & M has multiple stores in Australia and also provides online shopping for
Australian individuals.

A successful product that H and M have produced this year is there cropped hoodies, they
come in a variety of colours and designs and retail for an affordable $20-$25. H and M use
sweatshops in all their productions. There is no particular description of the production of the
cropped hooded sweater but it is assumed that it probably was made in a sweatshop.

H & M has set up operations all over the world because as the brand is growing they are
able to open multiple shops and to expand their brand. The main goal of most brands in the
fashion industry is to expand it into a worldwide renowned brand and H & M has earned
enough money to do that.

With H and M expanding the brand into a transnational company, more people will know
about it and it has a positive impact and benefits the company’s economic brand. However,
as said before H & M does produce their clothing items from sweatshops and this makes
them gain a whopping amount of profit when they are paying the employees low wages.
People purchasing their products more and more will make H & M continue using
sweatshops as it is faster and cheaper.