Globalization And The Rise Of Multinational Corporations And Branding

1448 words - 6 pages

Globalization and the rise of multinational corporations and brandingA further, crucial aspect of globalization is the nature and power of multinational corporations. Such companies now account for over 33 per cent of world output, and 66 per cent of world trade (Gray 1999: 62). Significantly, something like a quarter of world trade occurs within multinational corporations (op. cit). This last point is well illustrated by the operations of car manufacturers who typically source their components from plants situated in different countries. However, it is important not to run away with the idea that the sort of globalization we have been discussing involves multinationals turning, on any large scale, to transnationals:International businesses are still largely confined to their home territory in terms of their overall business activity; they remain heavily 'nationally embedded' and continue to be multinational, rather than transnational, corporations. (Hirst and Thompson 1996: 98).While full globalization in this organizational sense may not have occurred on a large scale, these large multinational corporations still have considerable economic and cultural power.Globalization and the impact of multinationals on local communities. Multinationals can impact upon communities in very diverse places. First, they look to establish or contract operations (production, service and sales) in countries and regions where they can exploit cheaper labour and resources. While this can mean additional wealth flowing into those communities, this form of 'globalization' entails significant inequalities. It can also mean large scale unemployment in those communities where those industries were previously located. The wages paid in the new settings can be minimal, and worker's rights and conditions poor. For example, a 1998 survey of special economic zones in China showed that manufacturers for companies like Ralph Lauren, Adidas and Nike were paying as little as 13 cents per hour (a 'living wage' in that area is around 87 cents per hour). In the United States workers doing similar jobs might expect US$10 per hour (Klein 2001: 212).Second, multinationals constantly seek out new or under-exploited markets. They look to increase sales - often by trying to create new needs among different target groups. One example here has been the activities of tobacco companies in southern countries. Another has been the development of the markets predominantly populated by children and young people. In fact the child and youth market has grown into one the most profitable and influential sectors. 'The young are not only prized not only for the influence they have over adult spending, but also for their own burgeoning spending power' (Kenway and Bullen 2001: 90). There is increasing evidence that this is having a deep effect; that our view of childhood (especially in northern and 'developed' countries) is increasingly the product of 'consumer-media' culture. Furthermore, that...

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