Economic globalization

1.Summary

 

Like we studied from our class in this semester, the whole world are becoming more and more interdependent. Globalization is now running in the political section, cultural section and also in economic section. It is definitely the most powerful influences of all the shape of many globalization form. Economic influences are very obvious to each individual. In 16th century, there are the first transnational corporation as a matter of fact, such as the East India Company and the Hudson’s Bay Company. They actually initiate the global trading and service like the one of today’s. But after them, there were no companies like them untill the 20th century. In 1914, there are created many global companies. After World War 1, many other corporations were roused and became more popular and their influences over the whole world became stronger. Currently, Transnational corporation as a firm that has the influence over the world has been created. Many firms has been became transnational. It is very complex to explain why they developed. We can classify the phenomenon about two categories. It is ‘Market-oriented investment’ and ‘Asset-oriented investment’. There are two major ways that corporations control the transnational activities. First, there is investment. People or corporations invest their profit to the uprising company. It is called Greenfield investment. Second, Corporations merge or collaboration as a engagement. Greenfield investment can name as a new facility. They build a factory to distribute some part of stock to do their task. Next, many transnational Corporation do Engagement with other corporations to go abroad.

TNC is the most important facter that runs the economic globalization nowadays. As we studied already, the world is becoming more and more interdependent and complex. In modern society, corporation never exist just alone. Nowadays, TNC is connecting to even local town and nations. In these sense, TNC became to have a power within the global world. Tha basis of power of TNC lies in the potential ability to take advantage of geographical differences in the availability and cost of law materials or resources in state policies. But, the power of TNC causes very hasty generalizations because it does not mean the TNC always have positive side. It may creates the inequality of global economic distribution of power

2. Interesting thing I learned

 

I learned about the brief history of TNC. I thought that TNC is only matter of things between country to country. But actually, TNC are connected to the local town and even nations. So TNC’s scale is much bigger than I thought. In globalized world, the role of TNC will be much more important Because of their influences over the whole world. TNC have to consider the side effects of global economy and then appreciate their role inside the global economy.

3.Discussion point

 

After reading this article, I think the power of globalization is really strong. Especially, the economic factors are very close to each people like me. Everything around us has affected by the economy. In this sense, the emerge of the TNC is maybe causes some problem to the local economy. There is a term called economy of scale. TNC’s scale is very huge so it’s influences are much more broad. TNC may control the local economy by trade. Or, maybe, TNC could put the local small corporation into danger. How do you think about the side effects of TNC?

Economic Globalization

Summary

The globalization which was caused by advance of technology affects to economical areas. The world has become more interdependent as rising of international trade and their specialization. People can use some goods as a cheaper price that cannot produce in their own nation in the past time. Our world make WTO(World Trade Organization) for operating these trade. It means that the economy has become globalization.

This article focus on the TNCs(TransNational Corporations). TNC is a corporation that do a global commercial activities based on their own country. They grow in the period of World War 1 that was occurred in 1914. The global-scale war needed many war supplies so some firms can grow largely. Now, they have powerful economical abilities than the nation-state. It is caused by geographical extent.

Despite TNC develops these days, their investment continues to be market-oriented. And second reason of firms engage in transnational investment is assets that firms need to produce and sell products are also geographically very unevenly distributed. TNCs has complex process to embedding in society. The complex process includes some interaction and place-specific characteristics.

For these reasons, TNCs form the dynamic networks. Despite of dynamic networks the maintenance of TNC is much harder than the normal firms. TNC's headquarter is located in their own country, even the functions of headquarters may be handled by their branches in other countries. So the transnational networks is the essential one. Also TNCs is related largely to other firms. They have relationship as supplier and consumer.

In case of Europe, EU(European Union) maintains the oldest economic cooperation. In fact, the EU forms the political, social bonds as well as economy. In economical aspects, Economic cooperation, such as tariff elimination, seeks to cooperate not only in economics but also in other social factor's unification. However, the EU faces conflicting interests in terms of unity among different nations. The differences in culture, language, race and currency occur some conflicts in EU.

 

Interesting Things

Before I learned this lecture, I didn't know that what is TNC. TNC is very familiar things such as Korean conglomerate firms(Samsung, Hyundai,..). TNC affect to their country and the whole world.

It has come to the situation where people interact with each other wherever they live. The advent of large corporations has expanded the choice of people's spending. So I think the world economy is unified and the interests of the nations are becoming clearer. The side effect of this globalization is conflicts of interest within the national interests of the nation, as described in article. It is quite interesting to note that this phenomenon is a real phenomenon called the "BREXIT"

 

Discussion Point

After reading this article, we learned that the economic globalization give us many conveniences but there is also adverse effects. Now countries around the world have an economic agreement with other countries that match their interests. But in 2008, people opposed the nation's plan to hold a large-scale candlelight rally in Korea. Also, in 2016, farmers held rallies for the price of rice. During the repressive process, one person died from a police crackdown on water cannons. As such, the nation which is deputy of the public can not represent all the people. In particular, the economic agreement is a cautious matter in terms of having a direct impact on individuals. How should the nation reconcile the public opinion of the opposing people?

Economic Globalization

1. Summary

There is a clear consensus that the business corporation is the central actor on economic globalization – specifically the transnational corporation (TNC). The development of companies outside their home country was part of the early development of early international economy such as the East India Company and the Hudson’s Bay company. they are the ancestors of today’s global trading and service company

 

However, the first firms to engage in manufacturing production outside their home country did not emerge until the world war 1. In 1914 US and many European manufacturing companies were becoming increasingly transnationalized. since then, the number of TNCs in the world economy has grown.

 

The ‘placeless’ giants global corporations like General Motors, Royal Dutch Shell, IBM, Toyota, Unilever and others are being more powerful than many nation-states. But the vast majority of the world’s leading TNCs still retain more than half of their activities in their home country. What they all have in common is they operate in different political, social and cultural environment.

 

Then why and how firms ‘transnationalize’? The reasons why TNCs extend their operation are complex. But we can boil these down to two broad categories. Market-oriented investment and asset-oriented investment.

 

Market-orientated investment

a firm may have reached saturation point in it’s domestic market. Access to the market can be restricted because of political regulatory structures or cultural reason.

 

Asset-oriented investment

The geographical unevenness of market is one major set of reasons why firms engage in transnational investment. Firms in the natural resource industries have to locate at the source of supply. labour cost is other factor. Many types of transnational investment have been very sensitive to geographical variations in labour cost.

rld. EU also has made considerable reorganization of existing corporate networks by existing and new TNCs. WTO is also influence on transnational networks as a regulation. we need to avoid the simplistic view that TNCs always prevail. it dose’t posse absolute power.

 

There are two major ways in which firms develop transnational activities: ‘greenfield’ investment and through engagement with other firms. Greenfield investment is building of totally new facilities. e.g., Japanese automobile firms – Nissan, Toyota, Honda in North america and Europe. The other strategy is to collaborate with one or more other firms. GM has collaborative ventures with Toyota, Ford, Fiat, Renault amongst others.

 

Place and geography still matter fundamentally in the ways in which firms are produced and in how they behave. Hence, over time, societies have tended to develop distinctively. Not all the capitalisms are the same. Forms of economic coordination and governance cannot easily be transferred from one society to another.

 

However, a few generalizations can be made. As in the cases of EU or NAFTA. States strive to minimize such ‘regulatory arbitrage’ The relationship between TNCs and states are complex. TNCs may be constrained in their freedom of action. They may be powerful. but they do not possess absolute power.

 

 

2. Interesting

 

TNCs are becoming powerful. But there are also very strong regulation by source of supply, labour, culture, and nation-states. TNCs are very powerful nowaday. And but still, they can not control global-size economy over nation-states.

 

3. Question

 

Since WTO(World Trade Organization) has established, many countries have attempted to make global agreement under negotiation. But many rich countries rather tend to reduce their economic barrier by joining individual agreement(FTA). The idea to unified trade regime for the entire globe seems to fail. I want to discuss that why WTO members have failed to agree global trade deal.

Economic globalization

1.     Summary

In these days, almost of large firms aims to global market. Like the movement of political globalization(expending international political spectrum), Economic globalization makes the movement of transnational corporations. This chapter shows 5 issues of TNC.

The scale and geographical distribution of transnational corporations

In 16th century, the East India Company and the Hudson’s Bay Company created vast business work at a world scale. Of course, they could be an ancestors of today’s global trading and service but there were no companies which manufactured their products in oversea, until 20th century. In 1914, many western companies(US,UK and European) became to increasingly transnationalized. Recently(past 50years), the number of transnational corporations is extremely increased. The term of TNC in today is ‘a firm which has the power to coordinate and control operations in more than one country, even if it does not own them’ but it is not enough definition to quantify in aggregate terms. Because it is on the complex relationships. In aggregate terms of TNC activity is conventionally measured using statistics on foreign direct investment (FDI). And most of activities belong to some largest TNCs.

Why (and how) firms ‘Transnationalize’

This is complex to describe one way. But we can classify into two categories :market-oriented investment and asset-oriented investment. Market-oriented investment view explains that profitability depends on expanding of market beyond its home territory. And view of asset-oriented investment focuses on geographical unevenness. Asset for produce and sell products are not evenly distributed in geographical view.

Also, there are two major ways to develop transnational activities. One is greenfield investment which is the way to make new facilities for produce. It is classified into foreign direct investment so it’s risky but it creates employment. The other one is through engagement with other firms, typically merge, this way has opposite effect of greenfield.

Geography matters: The embeddedness of transnational corporation

 Geography matters are fundamentally in the ways that corporations are produced and in how they behave. Variety environments like cultural, political, cognitive, social matters affect all activities of TNCs. With the globalization, geography matters are more complex formed. But there is no placeless type. Each company tried to adapt specific situations and it is continued to make up the new intrinsic economic environment.

‘WEBS OF ENTERPRISE’: TRANSNATIONAL PRODUCTION NETWORKS

 Today’s businesses are composed of very complicated process. All transnational corporations have the complex network for developing their business. They are related by resource, produce facility and channel to customers. It is also same in single nation company but it is much important to TNC. Because it is much difficult to systematize and control the situation.

THE POWER RELATIONSHIPS BETWEEN TNCs AND OTHER ACTORS IN THE GLOBAL ECONOMY 

 TNC shows various influence in vast area and it is definitely main movement of economic globalization. But it works in complex fields and it’s potential is came from availability and cost of resources and also other social factors local policies. So the way of TNC is not unbeatable and even they cannot support form nation’s protect. Aside from the discussion of power, clearly TNC has a potential to lead the era of globalization.

2.     What did I learn

 I think whole concepts in class are related. Globalization is caused by extension of each entity’s influence. Cultural globalization is like the movement of dyestuff in waterborne phenomenon and political globalization felt as interaction for coexistence. Economic globalization is the most reasonable concept. The first priority aim of Firm is maximizing profit. In the past, there are no rules or guideline of international trade, so it is difficult to work about international business. But nowadays international rules are established and traffic communication developed as enough to active in vast area. If TNC has a difference, it is they don’t belong to specific nation. From now on, the interaction between international organization is more complex. And I think we have to more concern about each products and issues.

3.     Discussion point

 I want to discuss about actual activities of TNC in Korea. I learn about TNC’s process in the text but I still have no idea about actual influence to my life. Maybe most of large companies which lead Korea are almost TNC now. And I wanna talk about effect from changing into TNC with classmates.

Economic Globalization

1.     Summary

The modern definition of TNC are incorporated or unincorporated enterprises comprising parent enterprises and their foreign affiliates. A parent enterprise is defined as an enterprise that controls assets of other entities in countries other than its home country, usually by owning a certain equity capital stake.TNC appears in fifteen century in Europe, after world TNC has grown dramatically. Firms like General Motors, IBM, Toyota, are the most prevelant form of TNC.

TNC activitiy can be measured statistically by using FDI(Foreign Direct Investment) FDI has grown consistently two and ten times more than 1986. Currently, one third of the world total FDI accounts in developing countries like East Asia. FDI is significant in Asia, but it is not preferable opinion. There are some reasons for transforming coporations into TNC .The size and own characeristics of company have a influence on the locational decisions of TNC. The geographical unevenness is the main factor of why firms involved in transnational investments. Some assets like human resources are unevenly distributed and it is a vital source in transnational investment.

There are two ways in which firms develop transnational activities. One is a greenfield investment and the other is merge and acquisition form of investment. Greenfield investment establishing totally new facilities is the most preferable type of investment by host countries , because it produces stocks in firm and countries efficiently. Merge and acquisition type of investment seems more practical rather than greenfield investment. Another strategy is collaborating with one and or more firms. They are gaining economic power and adding a new component called collective competition

The establishment of the NAFTA is leading to a reform of corporate activities and networks organized at the regional scale are apparent in most parts of the world. EU also has made considerable reorganization of existing corporate networks by existing and new TNCs.. WTO is also influence on transnational networks as a regulation. we need to avoid the simplistic view that TNCs always prevail. it doesn’t posess absolute power.

2. Interesting

I knew the many forms of TNC corporations and many agreements like FTA and TNCP has a significant role in increasing or decreasing the TNCs. TNCs is highly involved in human resources. I think those firms have a social resposiability as influcing domestic economy.

  In korea, there was a TNC firms like carrefour mart. French retailer,

since they collapsed the Korean retailer have to send the dismissals of over 1,000 so-called non-regular workers. many people struggled for losing their jobs and their livelihoods was a desperate one for the mainly young women workers involved. 

3.Question

Some retailer is suffering from calls for action against abusive working conditions in foreign plants that produce clothing for them under sub-contracting arrangements, although the retailer has no equity ownership or even foreign presence in the country in which the abusive labor conditions exist. The impact of TNCs on people around the world has grown paradimically as these firms of economic globalization reach into the life of domestic societies through both equity and non-equity mechanisms

 what should determine the appropriate function and limits on TNC responsibility for social conditions around the world?

Economic Globalization

Summary

In explanation about economic globalization, business corporation is main actor. It specifically called 'TNC'. We live in a world of global corporation. At the same time global corporation is significant in terms of political spectrum. Main issues are: (1) the scale and geographical distribution of TNC(the transnational corporation) in the global economy; (2) why and how corporations engage in transnational activities; (3) the geographical embeddedness of transnational corporations; (4) the 'webs of enterprise' manifested in transnational production networks; (5) the power relationships between TNCs and other actors in the global economy.

 

1)

In 1914, UK and some European manufacturing companies were becoming increasingly transnationalized. The most well known definition of a modern TNC is 'a firm which has the power to coordinate and control operations in more than one country, even if it does not own them'. And some global corporation called 'placeless' giants. Because they owe no allegiance to any particular country or community and have operations span the globe. But these majority TNCs still retain more than half of their activities in their home country and one or two countries outside their home base.

 

2) The reason can be thought market-oriented investment and asset-oriented investment. In terms of market-oriented, to increase profitability, corporation expand its market beyond its home territory. But access to the market may be restricted because of political regulatory structures like import tariffs. And in terms of asset-oriented, the main reason is the geographical unevenness of markets. And second reason is the assets that firms need to produce and sell their products and service are not enough, so firm may need to exploited new country.

Also many of the early leading TNCs were effected in the natural resource sectors. This involves human resources. The so-called 'New International-Division of Labour' was base on the claims that firms in the Western industrialized countries were fleeing the constraints of high-cost, militant labour to tap cheap in developing countries.

 

3) Global corporations are bearers of such characteristics, which interact with the place-specific characteristics. It appears verity 'placeless' type. This is because under specific circumstances, each society have tended to develop distinctive ways of organizing their economies, ideology of capitialism.

 

4) TNCs like firms in general have dense network which is both organizationally and geographically. And TNCs are far more difficult to coordinate and control whose activities are confined to a single national space. TNCs tend to develop distinctive patterns for each function. For example, TNCs labour is expressed in a distinctive external division of labour. But most the corporate headquarters remain in the firm's home country. These network engaged in processes of restructuring, reorganization and rationalization. TNC networks are always in a continuous state of flux. Some part grow rapidly, others may be stagnating, others may be in decline. Such restructuring and rationalization inevitably causes tensions between TNCs and other 'stakeholders', notably governments and labour.

 

5)

TNCs are dependent on other firms for many of their need. This relation appears state of flux. Pressures on suppliers to deliver 'just-in-time', pressures on them to reduce prices, pressures on them to take on more responsibility and risk have come to characterize a number of global industries.

The basis of TNC's power lies in their potential ability to take advantage of teographical differences in the availability and cost of resources and in state policies and to switch and re-switch operations between locations. International regulatory bodies like WTO have significant role about geography of transnational production networks. As Harvey notes, "we need to avoid the simplistic view that TNCs always prevail. TNC's may be powerful - but they do not posses absolute power."

 

Interesting

I interestingly read explanation about 'New International-Division of Labour'. TNC find cheap labour in developing countries and there are high cost labour in Western society. Also, 'flex' word often watched in explanation TNCs emergence and network structure. When I read 'flex', I thoght the word 'liquid modernity' used Zygmunt Bauman. Liquid modernity is represented postmodernity.

Zygmunt Bauman's Liquid modernity is written in wikipedia. "'postmodernity' by using the metaphors of "liquid" and "solid" modernity. In his books on modern consumerism Bauman still writes of the same uncertainties that he portrayed in his writings on "solid" modernity; but in these books he writes of these fears being more diffuse and harder to pin down. Indeed, they are, to use the title of one of his books, "liquid fears"—i.e., fears about pedophilia, for instance, which are amorphous and have no easily identifiable referent."

 

 

question

 In text, there are two step about New International-Division of Labour. I think south korea society has tree step Labour network after emergence of TNC. In south korea society, foreigner from the Philipines, Indonesia offers cheap labour and most korean high educated hope high cost position in global corporation. But in terms of Western society, these position also is belong to low quality position. Nevertheless High educated korean tend to prefer TNC than logical corporation. Why they prefer global corporation and How think about my opinion about three steps about Labour network in korea?

Economic Globalization.

Economic Globalization

1. Summary

As a political perspective, Not only left but also right political perspective say that Our Economic system is Global; Economic Globalization.

The scale and geographical distribution of transnational corporations. - Actually in the 16 C, there was also Transnational corporation such as British East india company like that. After WW1 the transnational corporations became more popular and more bigger. Some of the Most biggest transnational corporations own most amount of economy, market and interest.

Why and how firm "Transnational" -
There are many reasons why the corporations do a transnational. First of that reason is market oriented investment and Second of reason is asset oriented investment.

Modes - There are two major ways how corporations do transnational activities. One is greenfield investment and another is engagement with other corporations as merge or collaboration so on.
Greenfield investment can name as the totally new facility building. It can exist as the factory building to separate by each part of stock to do their task.
Many transnational Corporation do Engagement with other corporations for their activities in abroad. By merge or collaboration, Transnational Corporations can remain in the Global market and make possible their goal in the global market.

TNC is main movement of economic globalization. Our world is becoming  interdependent and connect to each other more deeply. Not only each nation but also each corporation can not survive as itself. They must corporate to each other for make their profit and make sure that their remains. Nowadays TNC is connected to nation, corporation, local town and people. TNC makes possible many thing for us and give more option and chance for us to do something.

2. What did i learned

Since i read this article, i don't know about the Economic globalization exactly.
I can know many things about the economic Globalization to not only this article but also class. In the class, we talked about world trade. There are many agreement and many organization relate to free trade. We can say that the modern trade is not protect but free.
Korea government did many free trade agreement and also participate in many free trade organization. We talked about many free trade like TPP, RCEP and so on. We can know about that the free trade is just like a coin so there are always dark side and also bright side. As we talked and found information about the Korea rice market, which it is related free trade, we can think about who will win and who will lose because of free trade. We must think about the counter attack to free trade. Some nations doesn't want to free trade no more. They want to protective trade. The reason why they think like that is job. Really many people think that because of free trade, too many foreigner worker came to their nation and the foreigner work do their job so they lose their job. Actually is is half right and half wrong. I think that the reason why brexit and Donald Trump became the president of U.S is this kind pf thinking and opinion. The British people ,who voted for brexit, thought that they lose and give up too many thing because of EU. It is just same as U.S people who voted for Donald Trump for their president.

3. Discussion point

I am really interesting in the nowadays Economic Globalization. As we already know that we are living in the Economic Globalization society. Because of the Economic Globalization society, many thing can be possible. One of example is that shopping. We can buy many thing, which came from other nations and there are really many option to buy something. ( you can think about when you buy shoes- Nike, Adidas, Puma, so on...). There are really many global organization relate to economic around the world.  WTO is the best example of that can show the economic globalization. I want to ask question to you "How does our economic market change? " As you know that our economic market changed really many times and it is still changing. Is this kind of change good for us ? If it can influence bad and side effect on someone, who will lose their profit?
And my last question is "How can we prepare and ready for economic globalization?" As we already know that the Economic Globalization is main movement of Economic and nobody deny to that fact. I think that there are always winner and also loser during the process and also after that movement so what can we do for this kind of movement and what is the problem of economic globalization and how can we handle that ?