Globalisation

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  • Created by: niamh123
  • Created on: 31-12-14 17:47

Clark Fisher Model

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Creating a global economy

World Trade Organisation:

Deals in the rules of trade between countries ensuring trade flows freely.

International Monetary Fund:

188 countries who work to promote financial cooperation between countries to reduce poverty, this is usually through the promotion of trade and high employment.

Transnational Companies:

A global company that operates in more than one country.Often with headquaters in a MEDC and factories in LEDC as workers are cheaper.

Has globalisation created a more eqal world?

TNC can often cause local business to strugle as they are able to offer service and products cheaper.

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Change in flow of capital in the last 50 years

1980s

More raw materials coming from developing countries.

More manufatured goods leaving developing countries.

Now

More equally balance of both and developing countries have begun to trade between themselves aswell.

Why have these changes occured?

The cost of transporting goods has fallen, meaning it is easier for LEDC to transport goods.

TNC have taken advantage of cheap labour in LEDC and set up factories, meaning that they transport more manufactured goods.

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Case Studies

Nike

Head quaters: Oragon USA

Factories: majority in South East Asia, especially China, and also in South America

Why do they outsource?Labour and land is cheaper, meaning bigger profits can be made.

Why use contract factories? Do not have full responsibility for things such as working conditions, hours or pay. Also if a cheaper contract is found in another country they can easy swap to it meaning they are not tied down in a certain counrty.

BT

Why use LEDC? It is cheaper to employ workers there than in MEDC. They can also afford to pay more than local companies meaning that they get higher skilled workers for thye job.

Where? Bangalore, India. The workers are overqualified for the administative jobs as they are paid very well compared to most other jobs in the country.

This means that the TNC is taking them away from jobs that could be better contributing to the economy and society.

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