1. MNC’s and Globalisation

2. What is Globalisation? The growing interdependence and interconnectedness of the modern world through increased flows of goods, services, capital, people and information. The process is driven by technological advances and reductions in the costs of international transactions, which spread technology and ideas, raise the share of trade in world production and increase the mobility of capital.

3. What is Globalisation? Improvements in transport and communication have helped to create global markets for goods and services. Increasingly firms are trading throughout the world rather than focusing on a single country or region – they are becoming multi national corporations.

4. What is Globalisation? • It means different things to different people and it can be viewed as being good, or bad, or as having the potential to be either. • It means different things to different people and it can be viewed as being good, or bad, or as having the potential to be either.

5. Examine advantages to Dyson of moving production to Malaysia • Low cost • Skilled Labour • Less Government interference • Expanding market

6. Examine the consequences to other stakeholders of the move • Workers will lose their jobs • Other businesses in Malmesbury will suffer • House prices may be affected • Governments lose tax revenue • Balance of payments may be affected • Consumers may get lower prices • Shareholders may gain profit/dividends

7. Examine the consequences to other stakeholders of the move • Workers will lose their jobs • Other businesses in Malmesbury will suffer • House prices may be affected • Governments lose tax revenue • Balance of payments may be affected • Consumers may get lower prices • Shareholders may gain profit/dividends

8. But…….On the other hand • Are skills and technology really transferred? • Are benefits shared equally? • What about pollution? • What about cultural effects? • Are the benefits sustainable? • Will profits be repatriated? • Will tax be paid?

9. Examine the view that global branding is vital for success • Global branding means global markets • More sales • More profit • Diversification • Economies of scale • Doesn’t matter if one product or several

10. But ………….. • Expensive – high start up costs and continued promotion • Maybe diseconomies of scale • Maybe disenchantment (see Coke and Nike) • Is it ethical? • Isn’t niche marketing possible? • Should a firm concentrate on defending its home market?

11. Is Globalisation Ethical? • Exploitation of resources benefits developing countries • Trade can raise living standards • Social and environmental auditing ensures business are accountable • Ethical trading is expanding

12.  • Gov.t control is weaker in LDC’s • Firm’s seek to maximise returns for shareholders • Firm’s may be reluctant to internalise production costs • Small, local producers are squeezed • Benefits of globalisation do not reach the Is Globalisation Ethical?

13. Case Studies in Globalisation Pharmaceutical companies Drugs are not just any products, they must be surrounded by more ethical and moral principles than other products (Frederik Hedlund of Sweden) The legal drug scene is nothing short of scandalous (Susan George)

14. Criticisms of pharmaceutical TNCs NGO’s allege that drug companies: • sell products in developing countries which have been withdrawn in the West; • Sell their products by persuasive and misleading advertising and promotion • Cause the poor to divert money away from essential items, to paying for expensive, patented medicines adding to the problem of malnutrition;

15. Criticisms of pharmaceutical TNCs • Promote antibiotics for relatively trivial illnesses; • Charging customers in developing countries higher prices than those in the West. • Do not provide instructions for medicines in the local language • Resist the development of low cost generic drugs • Use the support of national governments to threaten governments who may damage their interests