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      TNCs: Advantages and disadvantages

      Lesson details

      Learning outcome

      I can explain the advantages and disadvantages of TNCs for both high and low income countries.

      Key learning points

      1. Transnational companies can bring benefits and disavantages to countries.
      2. Benefits from TNCs include the creation of jobs, new trade markets and better education to produce skilled workers.
      3. Disadvantages of TNCs can include exploitation of the host country, poor treatment of workers and environmental damage.

      Keywords

      • Infrastructure - all the basic systems in a country, such as transport and power supply

      • Host country - the new country which the TNC has set up a new factory, office or shop in

      • Standard of living - the level of necessities and comforts of daily life that is available to and affordable by a person

      • Multiplier effect - More people have jobs so have more money to spend, giving other businesses more money so they expand and employ more workers

      Common misconception

      Living standards and quality of life are the same.

      Living standards are about the the level of necessities and comforts of daily life that is available to and affordable by a person.

      Teacher tip

      Explain to students that often the advantages of TNCs are economic while a lot of the disadvantages tend to be environmental. Socially, people can be at an advantage or disadvanatage.

      Licence

      This content is © Oak National Academy Limited (2026), licensed on Open Government Licence version 3.0
      except where otherwise stated. See Oak's terms & conditions
      (Collection 2).

      Lesson video

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      Prior knowledge starter quiz

      6 Questions

      Q1.
      What does TNC stand for?

      Correct answer: Transnational Corporation
      Tree Nature Community
      Third Natural Cooperation

      Q2.
      What is a transnational corporation (TNC)?

      A company that operates only within one country
      A local family-run business
      Correct answer: A company that operates in multiple countries around the world

      Q3.
      Which of the following is an example of a transnational corporation?

      A small local book shop
      Correct answer: McDonald’s
      A local farm shop

      Q4.
      Which of these is an example of a global transport route?

      A road connecting two villages
      Correct answer: The shipping routes between Asia and Europe
      A railway line inside one country

      Q5.
      What is a disadvantage of globalisation?

      More cultural understanding
      Better quality products
      Correct answer: Exploitation of workers and environmental damage

      Q6.
      Which of the following is an effect of globalisation?

      Correct answer: Increased cultural exchange and sharing
      Local cultures disappearing completely
      More isolated communities

      4 Questions

      Q1.
      What is one of the advantages of TNCs in LICs?

      Correct answer: Job creation and economic growth
      Reduced cultural exchange
      More pollution in the environment

      Q2.
      Which of the following is a disadvantage of TNCs?

      Correct answer: Exploitation of workers and environmental damage
      Better wages for local workers
      Increased access to technology
      Increased local competition

      Q3.
      What does standard of living mean?

      Correct answer: The level of necessities and comforts of daily life available to a person
      The general well-being of individuals and societies
      Individuals lack financial resources and access to basic services

      Q4.
      How could a TNC setting up a new factory improve living standards?

      Increased employment
      Multiplier effect
      Increased tax revenue
      Correct answer: All of the above

      To help you plan your 8 geography lesson on: TNCs: Advantages and disadvantages, download all teaching resources for free and adapt to suit your pupils' needs...