1.6 Multinational companies (MNCs) questions for IB Business Management

Copperleaf Mining Zambia Ltd (CMZ) is the Zambian subsidiary of a Canadian mining multinational. It operates a copper mine near Chingola. CMZ’s published accounts show a small profit, even though world copper prices were high last year. A local residents’ association has asked to see the accounts in detail, because CMZ promised in 2022 to spend 2 % of its profit on a new clinic and on water supplies for nearby villages.

Maple & Birch Furniture

Maple & Birch Furniture Inc. (M&B) is a Canadian public limited company based in Quebec. It makes solid-wood dining tables and chairs and sells mainly to furniture retailers in Canada and the United States (US). About 55 % of its sales are now in the US.

M&B’s board is considering setting up a wholly owned subsidiary with a factory in Monterrey, Mexico. The factory would supply the US market and allow M&B to sell to Mexico’s growing middle class. The investment would cost CAD 18 million. Mexican wages are lower than in Quebec, and Monterrey is close to the US border.

The chief executive, Jean-Luc Tremblay, argues that international expansion is essential because Canadian sales have been flat for four years. The union representing M&B’s 400 Quebec employees fears job losses. Some board members are concerned about security, changes in trade agreements between the US, Mexico and Canada, and how Mexican consumers would view a Canadian brand.

Table 1: Forecast cost per dining table delivered to US customers (CAD)

Beco Express (BX)

Read the resources and answer the questions that follow.

Beco Express (BX) is a social enterprise in São Paulo, Brazil, founded in 2021 by Tainá Ribeiro and Diego Alves, who grew up in one of the city’s largest favelas*. Many national courier companies refuse to deliver into favelas, so residents’ online orders are often returned or left at distant collection points. BX collects parcels from courier depots and delivers them through the narrow alleys (becos) on bicycles and motorbikes. It employs 110 young people from the favela as riders and pays them per parcel. BX is a private limited company and reinvests its profit; its mission is “every address counts”.

* favela: a low-income, densely built neighbourhood, often on a hillside, in a Brazilian city.

Image: a young rider in an orange BX jacket carrying a large parcel up a steep, narrow stairway between brightly painted houses. Text on the van parked below: “Beco Express – every address counts”.

Resource 1 – News article from *Periferia Notícias*

“Couriers don’t come here”: the favela start-up that does

More than 1.5 million people in São Paulo live in favelas, and many have stopped shopping online because parcels never arrive. Courier companies say the alleys are slow and unsafe. BX, which says its riders “know every door”, has grown quickly, but critics say it relies on young people paid per parcel with no employment contract.

Table 1: Deliveries to favela addresses in São Paulo, 2025

Resource 2 – Social media posts from Kauã, a BX rider

Two years with BX. I know every beco from the top of the hill to the bottom. Grandmothers wave when they see the orange jacket. This is the first job where I feel people respect me. [1/2]

But I get BRL 3.10 a parcel, I pay for my own fuel, and when I crashed my motorbike in March I earned nothing for three weeks. If BX wants to grow, it should grow with us, not on our backs. [2/2]

Resource 3 – Internal email from Tainá Ribeiro to Diego Alves

From: Tainá Ribeiro, Co-founder

To: Diego Alves, Co-founder

Subject: Zonamall’s offer

Zonamall, the online marketplace (a US-owned multinational) that gives us 64 % of our parcels, has offered to buy 60 % of BX for BRL 18 million. It would roll our model out to 40 favelas in Rio de Janeiro, Salvador and Recife within two years. We would keep the BX brand and run operations for three years, but we could no longer deliver for other online shops.

The other options are slower. The development bank would lend us BRL 6 million at 9 % a year to open our own hubs. A community leader in Rio has also asked to run BX as a social franchise (see Resource 5).

If we say no, Zonamall may build its own favela delivery service and stop using us. I don’t want to sell our mission – but I don’t want to lose 64 % of our work either.

CONFIDENTIAL: this email and any attachments are intended only for the named recipients.

Resource 4 – BX operating data

A new hub in another city is expected to have fixed costs of BRL 120 000 a month.

Resource 5 – Message from Marcos Lima, a community leader in Rio de Janeiro

“We want BX in our community, run by our own young people. I can find a warehouse and 50 riders. I would pay BX a franchise fee of BRL 40 000 and a royalty of 5 % of revenue, and follow your training and safety rules. Expect about 60 000 parcels a month after the first year.”

Resource 6 – Survey of BX riders (96 replies)

Himal Path Treks (HPT)

[1] Lhakpa Sherpa worked for fifteen years as a mountain guide for foreign tour operators before setting up Himal Path Treks (HPT) in Pokhara, Nepal, in 2017. HPT organizes guided treks in the Annapurna region for small groups of international tourists. It employs 12 guides and up to 40 porters in the busy seasons, and its groups stay in family-run homestays in mountain villages. Lhakpa runs HPT as a sole trader.

[2] Starting HPT was not easy. Lhakpa needed a tour-operator licence, which required a deposit with the government and proof of insurance for every guide. Foreign tourists booked mostly through large international websites, which charged commissions of up to 25 %. Demand is highly seasonal: almost no tourists trek during the monsoon from June to August. In 2020 and 2021 the pandemic stopped tourism completely, and HPT survived only because Lhakpa’s family lent him money.

[3] Altavia Resorts (AR), a multinational hotel group with its head office in Singapore, is building a 200-room luxury resort near Pokhara. AR will employ about 450 people and has promised to train local staff and to pay for a new road to a nearby lake. It also plans to offer its own guided treks, using international guides and staying in AR’s own lodges rather than village homestays.

[4] Nepal’s government welcomes the investment. However, owners of local guesthouses fear they will lose guests, and an environmental group has warned that more visitors will increase waste on trekking routes. Lhakpa believes that AR’s guests may want to book treks with experienced local guides.

Murrumbidgee University (MU) is an Australian university. Each year about 1 800 Malaysian students travel to Australia to study at MU. MU plans to open a branch campus in Kuala Lumpur, offering the same degrees taught in English, at fees about 40 % lower than studying in Australia. Some Australian academics would move to Malaysia for two-year contracts, and MU would recruit local lecturers. The Malaysian government regulates the content of university courses and requires some subjects to be taught to all students.

Analyse the opportunities and threats for MU of opening a campus in Kuala Lumpur.

Wimbi Seaweed Co-operative (WSC)

Read the resources and answer the questions that follow.

Wimbi Seaweed Co-operative (WSC) is a co-operative of 260 women seaweed farmers in Paje, on the east coast of Zanzibar, Tanzania. Members tie seaweed to ropes on wooden stakes in the shallow lagoon, harvest it every six weeks and dry it in the sun. Most of the dried seaweed is sold to exporters, who sell it to factories abroad that extract carrageenan*. In 2020 WSC also opened a small workshop where 22 members make seaweed soap for hotels. For many members, seaweed is the only income they control themselves.

* carrageenan: a substance extracted from seaweed and used to thicken foods, toothpaste and cosmetics.

Image: three women in bright kangas wading knee-deep in a turquoise lagoon, carrying baskets of red seaweed. In the corner, a bar of green soap wrapped in recycled paper with the label “Wimbi – from our sea, by our hands”.

Resource 1 – News article from the *Zanzibar Coast Herald*

Warming waters threaten the seaweed women of the east coast

Higher sea temperatures are killing seaweed in Zanzibar’s shallow lagoons, where the water heats up quickly at low tide. Farmers say crops that once grew in six weeks now often rot before harvest. Scientists expect the problem to get worse. Deeper, cooler water is better for growing, but it needs boats and floating lines, and many women farmers cannot swim.

Table 1: WSC’s seaweed output and price

TZS = Tanzanian shillings. USD 1 ≈ TZS 2 600.

Resource 2 – Email from Nordkapp Hydrocolloids to WSC’s chair, Mwanaisha Juma

From: Director, East Africa, Nordkapp Hydrocolloids

To: Mwanaisha Juma, Chair, WSC

Subject: Proposal for a long-term partnership

Nordkapp, a Norwegian multinational, plans to build Zanzibar’s first carrageenan processing plant at Fumba, employing 120 people. We propose a five-year contract to buy all of WSC’s seaweed at a guaranteed price of TZS 1 100 per kg, if WSC grows a deep-water variety on floating lines.

Nordkapp will supply boats, lines and training on credit, repaid by deducting TZS 150 per kg from the price. WSC must supply at least 400 tonnes a year and may not sell seaweed to any other buyer during the contract.

Resource 3 – Social media posts from Zuhura, daughter of a WSC member

My mother has farmed seaweed for 25 years. This year she lost half her crop to the heat. She says the soap workshop is the best thing WSC ever did – the hotel guests love it and it pays every month. [1/2]

Now a foreign company wants the women to farm in deep water. Only the men have boats. Who will really earn the money – my mother, or the men with boats? #SeaweedWomen #Zanzibar [2/2]

Resource 4 – WSC’s soap workshop: figures for 2025

Resource 5 – Survey of WSC members (180 replies)

Resource 6 – Statement from Pwani Hai, a marine conservation NGO

“We welcome investment in Zanzibar, and the government has offered Nordkapp a seven-year tax holiday. But floating lines in deeper water can damage coral and block fishermen’s routes. Nordkapp closed a similar plant in another country after six years when world carrageenan prices fell. Communities must not become dependent on one foreign buyer.”