Chapter 9 - Multinational Corporations Test

Why is economic growth quicker and easier for the Asian Tigers?

20th century japan (first Asian country to go through change) became urbanised, industrialised to achieve high mass consumption These significant changes made it easier fro Asian Tigers economies as just joined and picked up where Japan left off. (ALREADY ESTABLISHED)

Factors influencing the Rise of MNC's

Through the processes of centralisation + specialisation identified by Janelle's Spatial Reorganisation model CENTRALISATION- Occurring because big companies from the global economic core have the capital and the economies of scale to buy out smaller ones in the global economic periphery Example- Louis Vuitton + Campbell's Soup have done to R.M. Williams and Arnott's SPECIALISATION- Occurring because corporations can now set up and run different components of their operations in the localities having the greatest comparative advantage for each of these activities

Why is Rostow's Model Criticised?

Western outlook- description of what happened to Europe Only went through transformation as they had colonies to exploit- developed successfully as were able to take resources from colonies who remained underdeveloped

Change in politics + spread of MNC's

1990's- Cold War (capitalists- West USA + Western Europe) against (communists- USSR, China)= their satellites ended Now- nations across the world encourage international trade and make it easier for foreign businesses to invest in their countries Role is to assist international investment and international trade

Characteristics of World Cities

1. Having a large number of head offices of MNC's 2. Raise huge amounts of money to invest in developments of major projects such as factories + mines around the world 3. Found in places containing the worlds most important stock exchanges and head offices of the largest banks 4. Found in cities that contain top level firms in fields of insurance, law, property investment, accountancy + other financial business activities 5. Found in locations of high quality universities and research institutions 6. Found in cities that contain a large proportion of the most highly qualified people on the planet 7. Have a wide influence both within and beyond the countries in which these cities are located 8. Are most likely points of origin and diffusion for new ideas from research centres + universities + new fashions from their entertainment, design + high end clothing industries 9. Are major nodes or central points in networks through which people, info, money + goods circulate around the world 10. They range from a++ or alpha to sufficiency level cities

Factors of a Successful MNC

1. Need more than just permission of other nations + empires 2. Need systems for moving money between countries and for exchanging it to another currency 3. need to be able to more goods across borders without high import/ export duties 4. Done safely without goods/ money being captured by pirates/ bandits 5. Able to move info + employees quickly to control/ see development in workplaces 6. Need to manage movement of goods from countries where it is produced + sold

Rostow's Economic Transformation in Stages

1. TRADITIONAL SOCIETY Low growth Slow change rate Dependent on low technology agriculture Networks + interactions are local E.G Medieval Europe 2. PRECONDITIONS OF TAKE-OFF Economic growth + social change accelerate New scientific discoveries Contact with wider world E.G. Western Europe in Age of Discovery 3. TAKEOFF Economic Growth + social change rapid Technological discoveries External trade People move from rural to urban for work E.G. Western Europe- Industrial Revolution- development in textiles+ metal work 4. DRIVE TO MATURITY Economic Growth + social change begin to slow Advanced technologies applied to farming, mining, manufacturing + service industries International trade growing E.G. Western Europe in late 19th + early 20th century 5. HIGH MASS CONSUMPTION Economic Growth + social change slows as most people educated + well off urban dwellers Automation + offshoring occurs in farming + manufacturing Most employed in service industries Linked to global trading systems E.G. Western Europe in late 20th century

Nodes

A connection point in any network Example= A railway junction or an internet server

Multinational Corporations (MNC's)

A corporation that owns or controls the production of goods or services in more than 1 country. Example- NIKE

Range of World Cities

A++ or Alpha ++ Sufficiency Levels

Rostow's Economic Transformation of a country

Aim is to achieve economic + political success and international dominance Had to change from being rural + agricultural to urban Being technologically backwards to technologically advanced Low education to high education levels Has to go through stages sequentially

Periphery of an MNC

Are areas of the world that lack wealth and power and from which profits are transferred to the core

Evidence of Rostow's Model

Asia, Latin America, Africa began to transform in late 20th/ early 21st century following the stages More people left rural areas for work in urban Industries + services either owned/ contracted by MNC's International trading- help of government Development of new infrastructure helped achieve rapid economic growth + rise in standard of living

World Cities

Cities which have many connections to and considerable influence over other parts of the world; they are the most important nodes in global economic and cultural networks Are the major nodes or central points in the networks through which people, info, money + goods circulate the world

Core of an MNC

Consists of North America , Western Europe + Japan where headquarters of most large MNC's are found

Features of the Wallerstein's World System Model

Core Periphery Semi-periphery

Global Economic Relationships- the Imperial Era

European Imperialist Era Mother countries (cores) exploited their colonies (peripheries) Peripheries resources benefitted inhabitants of cores. Not peripheries where they were produced Goods more valuable than the raw materials Through development of mother countries became more richer + economically developed while colonies remained poor and less advanced primary producers. Colonial populations desire for independence came from 2 factors= felt culturally different + felt economically exploited 1. Felt culturally different= language, religion, dress, diet 2. Felt economically exploited Both motivations were seen through Mahatma Gandhi's Leadership of Indian independence movement in the early 20th century= unfair interconnection between farms of India and cotton mills in England

Why is Alcoa a good example of an MNC?

Has various parts of operations located in areas most suited to its different activities Global head offices in Manhattan- close to NYC stock exchange Dynamic major city Mines found in WA- factories close to mines- minimises transport costs Converts alumine to aluminium in Victoria- close to cheaper energy sources

Factors influencing the ease of businesses

Have a head office in a particular country or city Can control or oversee the work being done in the corporations factories, offices, farms, mines, warehouse or shops in various cities, countries or continents Money can be moved easily, instantly and electronically around the world. Can buy/ sell/ lease out/ hire any goods, services or people

What 2 Factors have influenced the centralisation + specialisation of global finance in London, Tokyo + New York?

INFORMATION (and money) - Moved anywhere instantly over internet -Volume of data + money is massive has to be stored in data banks p+ bank accounts - Physically close to each other + same part of city GEOGRAPHICAL- relates to the locations of 3 cities in complementary time zones. - Stock Exchanges work on same time zones (normal business hours) - At least 1 of the stock exchanges will be open for business almost all the time MON-FRI

What are BRICS and how do they influence global shift?

International grouping of.. Brazil Russia India China South America Are all large- contain 40% of worlds population All changing + growing Influences global shift by the core of these countries slowly growing

Global Periphery of an MNC

Is where the corporations branch plants are found. Example= The factories, mines, plant plantation that produce those products EXAMPLE= Where jeans are made, where coffee is planted

How does each Tiger Cub set up global networks + interconnections?

LOOK AT TABLE ATTACHED

Core (Wallerstein's World System Model)

Made up of the richest + most technological advanced countries e.g. electronics, aircraft manufacturing, top university's, fashion designers, entertainers + media corporations E.g. North America, Europe, Japan

What are the Tiger Cubs?

Malaysia Thailand Indonesia Philipines South East Asia Brazil China India Some Persian Gulf States Are a wide range of countries of all sizes that are beginning to go through changes -Some are democracies -Experiencing totalitarian rule by dominant governments - absolute monarchies -Experienced white dictatorship until 1992 -Experienced periods of military dictatorship -Extremely large/small populations -Rich in natural resources

Semi-Periphery (Wallerstein's World System Model)

Possess economic characteristics of both core + periphery. Are exploited by core (profits go back to headquarters) Exploit periphery (Target- made in developing countries e.g. Bangladesh) E.g. AUS- technologically advanced + highly educated, well paid labour force. But main exports are minerals + agricultural products E.g. BRAZIL- population poor, but contains important world city (Sao Paolo) + possesses major aircraft industry

Periphery (Wallerstein's World System Model)

Produces raw materials, simpler manufactured goods Semi-skilled Low paid labour e.g. minerals, agricultural products E.g. Africa, Latin America, parts of Asia

Geographical Specialisation

Refers to MNC's being able to set up and run different components of their operations in the localities which have the greatest comparative advantage

What factors can we use to identify whether a developing country is changing into a developed country?

Shift in employment from PRIMARY SECTOR (farming, fishing, forestry, mining) to SECONDARY SECTOR (manufacturing) to TERTITARY SECTOR (service industries) Manufacturing labour becomes skilled Local market grows + people become wealthier Local firms become established + increases Countries become more connected

Who are the 4 Asian Tigers?

South Korea Singapore Hong Kong Taiwan Constantly maintained high levels of economic growth Fuelled by exports + rapid industrialisation which enabled then to join worlds richest nations

Global Shift

The movement of wealth, power and influence from 1 major part of the world to another Is currently being seen as a movement from Europe and North America to Asia

Infrastructure

The physical, human + organisational facilities that a society requires in order to operate E.G. buildings, staff + hospital operating systems