global commodity chains Flashcards
example of value
silver, diamonds
power d
ability to make somebody do something they wouldn’t otherwise do
what are some value adding activities at firm level (value chains)
inbound and outbound logistics,
production,
marketing and sales,
services and maintenance
what are some value subtracting activities at firm level (value chains)
firm infrastructure (admin, accounting, legal),
technology development,
human resources management,
procurement
firms want to ______ value subtracting activities and ______ value adding
minimise,
maximise
how are global value chains topdown
focus on lead firms and inter-firm networks
how are global value chains bottom up
focus on countries and regions, which are analysed in terms of various trajectories of economic and social upgrading or downgrading
talk about buyer driven commodity chains
retailers and brands are power holders, finance and strategy - centralised; design, branding, marketing - brought in; production, logistics - outsourced
in buyer driven commodity chains what is centralised
finance and strategy
talk about producer driven commodity chains
technology and capital intensive industries are power holders (automotive, semi-conductor, electronics), operate through networks of subsidiary, suppliers and retailers
what are the main assumptions of global value chains
political economy and institutions matter,
upgrading is possible - economies can move from low to high value sectors, global inequality shifts around
what are two differences between gpns and gccs/gvcs
gccs/gvcs are linear structures, gpns incorporate different network configurations,
gccs/gvcs focus on governance of inter-firm transactions, gpns encompass different sets of actors and relationship
what do global production networks focus on production as
social processes of material reproduction, value production more than an exchange of like for like commodities
in global production networks is labour simply a commodity to be exchanged
no, labour produces value so is not simply a commodity to be exchanged
what do global production networks focus on vaue chains as
means of value creation for all parties involved
how do global production networks view processes
processes are inevitable - markets are natural, everything else is a barrier to markets, therefore to wealth of whole society
what does an economics centred perspective ignore
the social and political dimensions of production, value is produced socially, wealth transfer is from labour to capital
what do gpns do to firms
they integrate firms into structures which blur traditional organisational boundaries
what do gpns do to places
GPNs also integrate places in ways that have enormous implications for their economic development
intra-firm relationships d
between different parts of a corporate network, as each part strives to maintain or to enhance its position
inter-firm relationships d
between firms belonging to separate, but overlapping, networks as part of customer-supplier transactions and other inter-firm interactions
firm-place relationships d
as firms attempt to extract the maximum benefits from the communities in which they are embedded and as communities attempt to derive the maximum benefits from the firms’ local operations
place-place relationships d
between places, as each community attempts to capture and retain the investments (and especially jobs) of the component parts of GPNs
where on the value chains of production is the highest value capture usually found
tends to be at the high end of the value chain (design, brand, ownership and control) while assembly is far less significant in the total value added
what eventually happens to any capital inflow because of a tnc setting up in a local area
there will eventually be a reverse flow as the local operations remits earnings and profits back to its parent company
what are some possible benefits related to stimulating local firms by involvement in a GPN
placing orders with local suppliers leads to raised technical expertise,
experience gained in new technologies enables them to compete more effectively,
expanded activities of suppling firms and of ancillary firms involved in transportation and distribution results in creation of additional employment
what does the actual incidence of local linkage formation by foreign-controlled plants depend on
the particular strategy followed by the TNC and the role played by the local operation in that strategy,
characteristics of the local economy,
time (supply capabilities do not develop over night)
what is the critical factor that determines whether knowledge is diffused by the GPN locally
the extent to which the technology is made available to potential users outside the firm either directly, through linkages with indigenous firms, or indirectly via ‘demonstration effects’
the very nature of the tnc ______ the spread of its proprietary technologies beyond its own organisational boundaries
inhibits
what is the evidence of transferring technologies for the electronics industry in Malaysia
TNC participation has produced latent technological capabilities for absorption by local firms and have transformed the local environment to facilitate export manufacturing in these countries involving a high tech industry
what does the number of direct jobs created by the gpn depend on
the scale of its activities,
the technological nature of the operation, particularly on whether it is capital intensive or labour intensive
what does the number of indirect jobs created by the gpn depend on
the extent of local linkages forged with local firms,
the amount of income generated by the TNC and retained within the local economy (in particular the wages and salaries of employees and of those in linked firms will, if spent on locally produced goods and services, increase employment elsewhere in the domestic economy)
what else do you need to consider when thinking about jobs created by GPNs in local economies
quality of jobs (is there opportunities for advancement),
wages and salaries,
labour relations and working conditions
example of where new recruits have to do complex tasks as oppose to just ‘back office’ tasks * (will be great to have example in essay)
JP Morgan make new recruits settle complex structured-finance and derivative deals
what are the three aspects of environmental damage that are especially important
overuse of non-renewable and renewable resources (exploitation of fossil fuels),
overburdening of natural environmental sinks (increasing concentration of greenhouse gases),
destruction of increasing numbers of ecosystems to create space for urban and industrial development
