Transnational corporations (TNCs) are a central focus in IB Geography, particularly within the Power, Places and Networks unit. A transnational corporation is a company that operates in more than one country, with production, management, or services located across national borders. TNCs play a major role in shaping global interactions through flows of capital, goods, people, and technology.

One of the most important roles of TNCs is their influence on economic globalisation. By investing in multiple countries, TNCs connect national economies into global production networks. They often locate different stages of production in different countries to reduce costs and maximise efficiency. This creates complex global supply chains that link raw material extraction, manufacturing, and consumer markets across continents.

TNCs can contribute positively to economic development, especially in low- and middle-income countries. Foreign direct investment from TNCs can create jobs, improve infrastructure, and transfer skills and technology. Employment opportunities in manufacturing and services may raise incomes and support local economic growth. Governments may actively attract TNCs to stimulate development and integrate into global markets.

However, in IB Geography, it is important to evaluate the limitations of TNC influence. TNCs often have significant economic and political power, sometimes exceeding that of host governments. They may prioritise profit over environmental protection or workers’ rights, leading to poor labour conditions, low wages, or environmental damage. Weak regulation in some countries increases the risk of exploitation.

TNCs also influence global power relationships. Headquarters are often based in high-income countries, while production takes place in lower-income regions. This can reinforce global inequalities, as profits flow back to core economies while environmental and social costs remain in peripheral regions. Decision-making power is often distant from the communities most affected by TNC operations.

Another important role of TNCs is shaping cultural and consumer patterns. Global brands influence lifestyles, consumption habits, and cultural norms. This can contribute to cultural homogenisation, where local traditions are replaced by global consumer culture. At the same time, TNCs may adapt products to local markets, creating hybrid cultural forms.

In IB Geography exams, strong answers balance the advantages and disadvantages of TNCs. Students should recognise that TNCs are powerful agents of global interaction but that their impacts vary depending on governance, regulation, and local context.

Overall, transnational corporations play a key role in global interactions by driving trade, investment, and connectivity. Their influence highlights the unequal nature of globalisation and the need for effective regulation to ensure sustainable and equitable outcomes.

RevisionDojo helps IB Geography students evaluate the role of TNCs clearly by linking global networks, power, and development into structured, exam-ready explanations.