MNE’s, charities, not-for-profit and co-operatives

A292 OCR GCSE

What is a multinational company?

• A multinational company has branches in may countries. Ford and Sony are examples.

• Multinational companies do bring some benefits to developing countries. They provide jobs and increase the wealth of the local people. The country gains some wealth by way of taxes.

The problem with MNEs...• However, there are some problems as well. • The jobs are often low-skilled and poorly

paid. • Much of the profit will go out of the

country, and the company may pull out to relocate in a country where it can make a greater profit.

• Multinational companies are primarily interested in making profits for their shareholders.

• Paying wages is an expense that the company will try to reduce to as low a level as possible. Page 7

timeline

Who are Kraft Foods? Why are they a MNE?

• Kraft Foods are one of the world's largest food and beverage companies, with 2007 revenues of more than $37 billion.

• For more than 100 years, Kraft has manufactured foods.• Kraft markets a broad portfolio of iconic brands in more than 150

countries, including nine brands with revenues exceeding $1 billion: – Kraft cheeses, dinners and dressings; – Oscar Mayer meats; – Philadelphia cream cheese; – Maxwell House coffee; – Nabisco cookies and crackers and its Oreo brand; – Jacobs coffees, Milka chocolates and LU biscuits.

• They employ over 140,000 people around the world

Cadbury taken over by Kraft

More about Cadbury / Kraft

Read the wikiHow British is Cadbury anyway?

What is a charity?• Charities: Are set up for a

charitable purpose• Are not profit-making – so any

surplus they may make must be used only to further the organisation's purposes

• Are independent – that is, they are not a part of any governing department, local authority or any other statutory bodies

Pros and cons of being a charity

Advantages• Tax relief • Plus increased public

support as the organisation is more likely to be viewed as legitimate and worthy.

Disadvantages• Charity law imposes high

standards of regulation and bureaucracy.

• Trading, political and campaigning activities are restricted.

What do you think the top 10 UK charity brands are?

Write down your top 10 in order – see how many you get right!

1 Cancer research UK - £209m

• Cancer Research is the third largest charity in the UK by size of income. It generates over £380m a year of which 25% is from legacies, 7% more than the national average.

• Unsurprisingly, cancer is the most valuable sector within the top 100. It has over 30,000 supporters in the UK and, largely due to its name.

2 The National Trust - £192m

• The National Trust is one of the largest membership bodies in the UK with 3.4 million members and is the tenth biggest charity by income.

• 43,000 people volunteer for it and more than 12 million people visit its pay for entry properties with a further 50 million visiting its open-air properties.

• It is this huge and loyal support base helps drive its brand value of £192m

3 Oxfam - £172m• Over the past five years, Oxfam's

income has increased by an average of 8% a year to over £250m. The value of its brand increased 4% in 2006 and is now worth £172m.

• The volume of tragedies throughout the world which are broadcast to the UK ensure a constant stream of causes for Oxfam to campaign for.

• This, combined with its national retail network and communication campaigns ensures that Oxfam is never far from the public eye.

4 The Salvation Army - £113m• The Salvation Army, United

Kingdom with the Republic of Ireland, has experienced uninterrupted growth over the past five years.

• Programmes including homeless centres, drug rehabilitation centres, schools, hospitals and medical centres, as well as nearly 16,000 church and community centres.

5 The British Red Cross Society - £108m

• Despite an income that has reached a plateau and a brand value that fell by 3% in 2006, The Red Cross is still a very valuable brand, worth £108m in the UK.

• It trains 150,000 people each year in the UK in first aid. Its 35,000 trained volunteers, alongside its considerable international network, give The British Red Cross Society access to a large support base to call upon for fundraising activities.

6 Wellcome Trust - £104m• Wellcome Trust is the

world's largest medical research charity, funding research into human and animal health.

• It enjoys a prominent position on the world stage and with annual income in excess of £300m, has a considerable amount of influence.

7 RSPCA - £94m• The RSPCA has probably

been one of the most loved charities in the UK since its establishment in 1824. Someone calls the RSPCA every 25 seconds for help about preventing cruelty to animals and it successfully rehomes nearly 70,000 animals each year through its network of 174 branches.

8 Barnardo's - £94m• Over 120,000 children are helped

each year by Barnardo's. Its strong brand and popular, worthwhile, cause have helped increase its income by an average of 9% a year since 2001. Since 1867, Barnardo's has helped free children from poverty, abuse and discrimination and has become synonymous with effective advertising that supports and enhances its vision.

• Whatever the issue from drug misuse to disability; youth crime to mental health; domestic violence; child poverty to homelessness; Barnardo’s run 415 projects across the UK

9 The Arts Council England - £89m• For sixty years The Arts Council

England has been supporting the arts in England. It believes that the arts have the power to change lives and communities, and to create opportunities for people throughout the country.

• This belief is supported by an income of £379m from various sources including The National Lottery, the government, voluntary income and other fundraising activities.

10 The British Heart Foundation - £85m

• The British Heart Foundation has developed a sophisticated licensing program which has seen its brand endorse relevant products such as water, bath bubbles, tea and breakfast cereal.

• This supports the charity's aim to prevent heart disease. It also increases awareness of the charity, which translates into increased funds.

What is a co-operative?

Take notes of the next 4 slides and get ready for a quiz

There might be a prize or not ...

What is a co-operative?• From the outside, a co-

operative may look like any other business. It’s what goes on inside that makes it different.

• There are over 4,800 independent co-operatives in the UK.

• They work in all parts of the economy, from healthcare to housing, farms to football clubs, credit unions to community owned shops, pubs to public relations, wind farms to web design.

What sort of people are in a co-operative?

• Co-operatives are owned by ordinary people

• Co-operatives exist to serve their members, whether they are the customers, the employees or the local community. What’s more, these members are the owners, with an equal say in what the co-operative does. So, as well as getting the products and services they need, members help shape the decisions their co-operative makes.

• Across the UK, co-operatives are owned by more than 11 million people – and these numbers keep on growing.

Co-operatives share their profits• Co-operatives want to trade

successfully – they are businesses, not charities, after all.

• Members, such as farmers or freelancers, tenants or taxi drivers, can often do better by working together. And sharing the profit is a way to keep it fair and make it worthwhile.

• Rather than rewarding outside investors, a co-operative shares its profits amongst the members.

Members control• Because the very definition of

a co-operative is that the members control the capital and have their voices heard independent of pressure from outside investors or governments, they get to decide what happens to the profits – whether they’re reinvested in the co-operative, shared amongst the members or used to help fund work for their local communities.

Co-ops just British then?• In Kenya smallholders can

trade their coffee for a fair price only because they are members of co-operatives.

• In France nine out of ten farmers maintain their livelihood by being part of a co-operative.

• In Spain the fans of Barcelona have a say in their football club because it’s owned by them.

What is a co – operative then? (video)

Quiz

• 1: Give 3 examples of business type that could be a co-operative

• 2: Who owns a co-operative?• 3: Name another country other than the UK

where co-ops operate• 4: where does the profit go in a cooperative?• 5: what do you think a cooperative is now?