GS: Global Systems Flashcards
What does this section examine
The form and nature of the interdependence and interconnections (economic, political, social and environment) in the world today
List me two issues globalisation and global systems have created
Unequal flows of people, money, ideas and technology
Unequal power relations
These are very complex issues, with a recurrent theme of inequality.
Tell me about an issue of globalisation and global systems have created to do with unequal flows of people, money, ideas and technology
Unequal flows of people, money, ideas and technology, which in some cases can act to promote stability, economic growth and development but can also further inequalities, conflicts and injustices for people and the places in which they live.
Tell me about an issue of globalisation and global systems have created: unequal power relations
Unequal power relations enable some nations to drive global systems to their own advantage and directly influence geopolitical events, while other nations are only able to respond or resist in a more constrained way.
What do the benefits of globalisation depend on
Perspective of the person seeking benefit.
Tell me about the benefit of TNCs to the host country (globalisation): FDI
TNCs are a vital source of FDI - globalisation has created jobs all over the world.
Tell me about the benefit of TNCs to the host country (globalisation): multiplier effect
TNCs stimulate the multiplier effect, locally and nationally. The company itself may require locally produced components and other supply and distribution services. Meanwhile, increased wealth and disposable incomes will generate domestic demand and stimulate further growth. At a national level, revenues become available for investment in social forms of development- in public services such as health and education.
Define multiplier effect
A form of positive feedback where an initial investment creates more investment, both social and economic.
Tell me about the benefit of TNCs to the host country (globalisation): skills
TNCs not only provide employment, they also increase local skills. In some cases, this may help to offset large scale unemployment caused by the mechanisation of agriculture.
Tell me about the benefit of TNCs to the host country (globalisation): transfer of technology
TNCs are often responsible for the transfer of technology such as ‘just in time’ (JIT) production.
Tell me about the benefit of TNCs to the host country (globalisation): improved infrastructure
TNCs may construct or improve local infrastructure such as roads, bridges, etc., which benefits not only the company but the local area overall.
In the context of host countries (TNCs) how has globalisation brought stability to the world
Perhaps not economically as seen by the recession that took place during and since 2007/8, but politically. It is suggested that countries that depend upon each other economically are unlikely to be at odds with each other, certainly not in a military context. Whether or not countries are friendlier towards each other, it seems to be the case that the world appears to have a greater degree of political stability. That said, another country reaping the benefit of globalisation is Russia, and yet it seems to want to spread its political influence once again, thereby creating some sense of instability around the world.
Tell me about the benefits of TNCs to the country of orang (globalisation)
Although it is common for TNCs to move production to overseas locations, the headquarters usually remain in the company’s country of origin. Other high salary jobs stay, such as those in R&D, further enhancing skills levels. TNCs that move to locations with cheaper labour usually increase their profitability, which benefits the country of origin, as profits are returned for distribution to shareholders. Even the largest TNCs retain a physical foothold in the countries in which they are domiciled. This provides them with a sense of national identity. The national government of the country where a TNC is domiciled will benefit, as it collects corporation tax on its profits.
The costs of globalisation have particularly affected
Local economies, people, cultures and the environment. They have often led to disagreements, conflicts, instability and injustices.
Tell me about the costs of TNCs (globalisation) to the host country: competition
TNCs can prove lethal competition for local firms, which may go out of business, creating hostility among local people.
Tell me about the costs of TNCs (globalisation) to the host country: negative attitudes
TNCs often face negative attitudes from local authorities, residents and environmentalists.
Tell me about the costs of TNCs (globalisation) to the host country: low skilled jobs
Many of the jobs offered are low skilled. Managerial positions are often filled by people who have moved with the TNC, providing little prospect for locals to develop within their jobs and gain promotion.
Tell me about the costs of TNCs (globalisation) to the host country: exploitation of labour
Some TNCs stand accused of exploiting cheap, flexible, non unionised labour in sweatshops in developing countries. Working conditions in some factories are harsh: long hours for very little pay and employees get fee work related benefits.
Tell me about the costs of TNCs (globalisation) to the host country: fickle employers
TNCs can be fickle employers, moving elsewhere in the interests of profitability with little concerns for locals. Branch plants can often be the first to close, or be subject to merger, causing job losses.
Tell me about the costs of TNCs (globalisation) to the host country: repatriation of profits
Much of the capital generated find its way back to the country of origin.
Globalisation also results in TNCs being vulnerable to risks beyond their control, some natural and some human. Exposure to risks and to more volatile market forces in an interconnected and interdependent world is a big concern for major companies.
Tell me about the impacts of globalisation (TNCs) on host countries
It is often stated that TNCs exploit cheap, flexible, non unionised labour forces in the developing world. It is true that in the last two decades there has been considerable use of outsourcing and offshoring strategies. It is equally true that most large TNCs have established a basic standard of operation, which involves setting up training facilities for workers and providing promotion opportunities for the host country employees, and minimum wage and safety limits.
Define outsourcing
When a TNC subcontracts an ‘overseas’ company to produce goods or services on its behalf.
Define offshoring
The manufacture or assembly of a product in a developing country using components produced in the developed country.
Why have TNCS moved to developing countries
In order to make use of their labour supplies created by the so called demographic dividend. A demographic dividend occurs when the population of working age in a country is large in relation to the population of non working age. High rates of economic growth led by high productivity and supported by large working populations create the dividend.
