Globalisation Flashcards
What are the two definitions of globalisation
-Globalisation describes the process whereby regional economy societies and cultures become ever more interconnected
-globalisation is the way companies, ideas and lifestyles are spreading around the world within increasing ease.( global village)
What are reasons for globalisation
- Freedom of trade ( promoted by the world trade organisation (WTO)
- Improvements in communication (eg. Internet and mobile communication)
- Improvements in transportation (eg. Larger ships, economies of sale, speed of transport)
- Labour availability and skills in LEDCs (low labour costs, high skill levels , less regulation)
What does TNC stand for
Transnational corporations
What is a TNC
Transnational corporations are companies that have branches in many countries around the world. Their headquarters will usually be based in MEDCs but they spread their production to other countries( usually LEDCs ) all around the world.
What are some examples of TNCs
McDonald’s
Canon
HP
LG
Spotify
Shell
Apple
Coca-Cola
Nike
Skoda
Profit=
Revenue ➖ costs
Revenue
All the money the company makes from selling things
Costs
Is what is spent on making and selling the product (cost of materials, wages, ads etc)
Profit
What the company makes in the end
What does globalisation mean
It means the way things like companies, ideas, jobs, lifestyles fashions people are moving more and more easily around the world
What helps the process of globalisation
Air travel
Land travel (lorries)
Telecommunication (phones)
Communication (computers)
Who are the driving force behind globalisation
TNCs
What do TNCs do
TNCs want to spread around the world to help their business grow and profits rise. To do this, they will;
-Move factories to countries where wedges are lower and often move managers to manage them
-advertise all over the world so that people everywhere will want to buy their products
-Money and raw materials and finished goods from country to country country
WTO
World trade organisation
How does globalisation benefit TNCs?
It allows TNCs big profits
How, does globalisation benefit LEDC governments?
Gives their people jobs supporting their economy. It also helps them exploit their natural resources
How does globalisation benefit workers?
Gives them jobs reducing unemployment and allows possible promotion to manager increasing pay for them
How does globalisation benefit the WTO?
Completes their aim of breaking down barriers between nations and giving shoppers good choice
How does globalisation benefit economists?
Helps poorer countries develop and improve
How, is globalisation a good thing for MEDCs
Spreads their influence and they can tax the profits of TNCs
Why do TNCs have their factories in different countries to their headquarters
The mortgage accompany cells and the lower its cost the higher its profit will be. TNC headquarters are usually based in MEDCs but having their factories and offices located in LEDCs can reduce labour and raw material costs, increase sales and achieve favourable trading conditions.
What are the negatives of globalisation
-The deindustrialisation in HICs has led to job losses
-Some resources have been overexploited, which means they may run out
-Transnational companies can exploit poorer countries for their resources. In some cases people are given low pay or made to work in illegal conditions.(sweatshops)
-Small businesses are forced to close due to the competition from global chain stores.
-Threat to diversity - towns and cities are becoming more and more uniform, almost like clones of one another.
-Large amounts of pollution created by air travel and the movement of goods on ships and lorries.
-Diseases such as Covid-19 can spread from one country to another far easier with so many people and goods moving around the world.
Positives of globalisation
-Transnational companies developing in LEDCs an help to improve the economy and provide new jobs and skills.
-Far easier to connect with the rest of the world and keep up to date with foreign news and events.
-People can experience new countries and cultures around the world due to the media and better transport.
-We are able to buy cheaper products from abroad.
-Countries can share ideas and help each other develop new technologies.
What are sweatshops
a factory or workshop, especially in the clothing industry, where manual workers are employed at very low wages for long hours and under poor conditions.
