Globalisation Case Studies

General Facts & Figures:

·        The development of call centres abroad has happened relatively quickly in the last 10 years

·        Companies such as BA, BT, Barclays, Lloyds, TSB and HSBC, Virgin Media have all moved their call centres to India

Location:

·        Northern hemisphere in the continent of Asia

·        Bangalore is a rapidly growing city as a result of constant rural-urban migration

Why move?

·    Wages in Britain increased due to the minimum wage - this meant companies would have large wage bills

·    Large business tax bills plus additional costs due to high rents for buildings

·    Improvements in technology meanphone and internet connection is more reliable globally so it is just as easy for people to phone a faraway country as it is to phone people in their own country

·   Large numbers of Indians are fluent in English so there is not an issue with language barriers

·   Bangalore has a technology park within which subsidies are provided for purchasing firms

Advantages

·        About 10 % of the population (some 100 million people) speak English fluently

·        Of the 787 million living in towns about 80% are literate and 18% of these are graduates

·        Operating costs are between 10% and 60% lower than the UK

·        Salaries are lower e.g. £1200 compared to £12,000 per year

·        Low staff turnover

• Work 9 hour shifts

Disadvantages

·        Different time zones means that workers keep unsociable hours which impacts family life

·        Workers have very long hours and poorer pay than people working in the UK call centres

·        Some companies are starting to bring call centres back to the UK due to customer demands

·        Wages and social benefits such as housing are often far inferior than those promised to workers

• Poor working conditions and laxer health and safety regulations

General Facts & Figures:

·        In the last 30 years China has gone from mainly agricultural to manufacturing

·        Nike is a TNC with manufacturing locations in China

·        China is the 3^rdlargest economy in the world

·        Lots of TNCs have factories in China e.g. Nike, Hewlett Packard, Disney

·        The amount of products manufactured in China has rapidly increased e.g. 400 colour TVs were made in China and in 2004 75 million were manufactured

·        Manufactures products such as clothes, computers and toys

Reasons why it has grown:

·        No minimum wage so this makes labour cheaper as in the UK the minimum wage is £990 per month

·        Law says workers are only allowed to work 40 hours per week although this is not always enforced and often workers will work much longer hours

·        It has many Special Economic Zones (SEZs) they offer tax incentives to foreign businesses some pay no tax for 2 years then a reduced rate from then on

·        Health and safety laws are not heavily enforced

• There is only one trade union in China; All-China Federation of Trade Unions which is required by law to return people back to work as quickly as possible

Advantages

·        Chinese workers have  regular incomes especially women/ young girls

·        Government gains tax from the workers formal wages

·        Young girls are provided with food and board

·        Company has an obligation to ensure there are no  relationships between workers and no pregnancies this helps China with its long term population policy

• Increase profit margins for TNCs

Disadvantages

·        Long working hours often not having a long enough break and without overtime pay

·        Poor food and accommodation provided by the company

·        Lax health and safety rules means that some workers could suffer from loss of hearing

·        Very poor pay for hours worked

• It is illegal to join trade unions other than the All-China Federation of Trade Unions (ACFTU) so workers have very little rights

Key Words for this case study:

·        Special Economic Zones (SEZs) – a geographical region that is designed to export goods and provide employment

·        Trade Unions – an organised association of workers in trade who are formed to protect and further workers’ rights and interests

• Manufacture – make something on a large scale using machinery

General Facts & Figures:

•  Wind power has the potential to provide up to 20 times the world’s energy requirements.
• The price of wind turbines has fallen over 80% since 1980.

Benefits of location:

• Very strong winds
• Remote rural location so large areas of land
• Low population density reduces social impact.

·        Little impact on the local ecosystem

·        No greenhouse  gases emitted therefore no contribution to global warming

·        Creates jobs in both manufacturing and maintenance

·        Produces more energy in winter months when needed

·        Cheap energy – lasts 25 years

·        Low operational costs

·     Domestic investment in personal turbines allows the meeting of demand.

Disadvantages

·        It takes 30 wind farms to generate the same electricity as 1 coal fired station

·        Energy created in stormy conditions cannot be stored and goes into the national grid

·        Large areas of land needed

·        Migrating birds can be killed

·        30m high structures ruin the view

·        Noisy

·        Expensive to build and heavy upfront investment

·        Small A roads were closed as the large structures blocked the roads

·        Interferes with TV signals

·        To catch the wind the turbines have to be high up so very visible

General Facts & Figures

·        Population increases from 50,000 to 250,000 around Lake Naivasha

·        Popular cash crops include flowers and coffee

·        Kenya has a distinct rainy season

Location

Kenya is located in East Africa. It has an Indian Ocean coastline to the east and a large plateau at its western extremity. To the west, it is bordered by Uganda, to the south by Tanzania and to the north by Ethiopia.

Positive

·        People are able to gain a regular wage from cash crops

·        Demand from foreign countries is constant and not limited to the growing season

Negative

·        Drinking water contaminated with chemicals causing health issues 

·        Water levels are falling

·        Population has increased around Lake Naivasha, increasing pressure for homes and services

·        Land was previously used for subsistence farming - loss of traditional farming methods

Negative

·        Water supplies are affected by fertilisers causing issues with plant life and water ecosystems

·        Due to water use and irrigation in some places the River Ngiro runs dry in places impacting on ecosystems

• Poor quality land (marginal ) is used for farming – this can lead to serious soil erosion

Positive

·        Additional income for people as they are able to buy the resources needed e.g. food rather than reliant on subsistent agriculture

·        Government is able earn tax from people with more formal wages from cash crops  - 219000 people worked in tourist industry

Negative

·        Money goes back out of the country as leakage

·        In order to increase yields chemicals are needed to produce yields which are expensive

·        Farmers are reliant upon foreign countries and as such global economic slumps can have a local effect

Key Words for this case study:

·        Subsistence farming - Farming to supply food for their own consumption

·        Cash crop - farming a crop which they sell for cash to make a profit

·        Leakage – money escaping the country