L4:THE STRUCTURE OF GLOBALIZATION AND IT’ S GLOBAL GOVERNANCE

Market Integration
Integration shows the relationship of the firm in a market.Market integration as a
process which refers to the expansion of firms by additional marketing functions and activities
under a single management.

The Rise of Global Corporation

Global corporations are inseparable to globalization.

Types of Global Corporation International companies

Are importers and exporters, typically without investment outside of their home country.

Multinational companies
The investment in other countries, but do not have product offerings in each country.
They’re more focused on adapting their products and services to each individual local market.

Global companies
Invested in and are present in many countries. They market their products and services to each
individual local market.

Transnational Corporation
An enterprise that engages in activities which add value in more than one country (UNCTC).

BRICS Economies
Brazil, India, and China
The most dynamic sector of global corporate growth.
Represented in part by their significant FDI over the past three decades.
The global corporations in Brazil, India, and China to the current and projected global
economy is singular.
BRICS economies represent a primary force in both global production and consumption.
Unaffected by the US and European Markets in 2007.

General Agreements on Tariffs and Trade (GATT)

It was establish in 1947 and was a forum for the meeting of representatives from 23 member
countries.
It focuses on trade goods through multinational trade agreements.

World Trade Organization (WTO) 1993

Located in Switzerland with 152 member states as of 2008.
It is an independent multinational organization responsible for trade and services, non-tariff
barriers.

Organization of Petroleum Exporting Countries (OPEC)

1960 OPEC was comprised of Saudi Arabia, Iraq, Kuwait, Iran and Venezuela.
OPEC was formed, the member countries increase the price of oil in the pass had a relatively low
price and had failed in keeping up the inflation.
United Arab Emirates, Algeria, Libya, Qatar, Nigeria and Indonesia are today’s member.

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Political Ideologies and Global Imaginary
Ideology
A system of widely shared ideas, patterned beliefs, guiding norms and values, and ideals
accepted as truth by some groups.
Serves as guide and compass for social and political action.
First coined by Antoine Destutt de Tracy in the late 18th century.

Functional Level of ideology Distortion

The production of contorted images of social reality
assemble a picture of the world that both represents and distorts social processes.

Legitimation
The claim to legitimacy by ruling authority and the belief in the authority’s legitimacy by its
subjects.

Integration
Provides the society with stability as it creates, preserves and protects the persons and groups.

North American Free Trade Agreement (NAFTA)

NAFTA is a free trade pact between the United States, Mexico, and Canada created on January
1, 1994.

Capitalism and Socialism

Capitalism is a system in which all natural resources and means of production are privately
owned.
It emphasizes profit maximation and competition as the main drivers of efficiency.

Socialism
The property is owned by the government and allocated to all citizens, not only those with money
to afford it.
Socialism emphasizes collective goals expecting everyone to work for the common value on
everyone’s basic needs than on individual profit.

Communism
It is a political and economic system in which all members of a society are socially equal.

Reasons for market integration

*To remove transaction costs
*Foster competition
*Provide better signals for optimal generation and consumption decisions.
*Improve security of supply

Newly Industrializing Countries (NIC’s)

7 NIC’s including China, South Korea, Mexico, Brazil, India, Indonesia & Thailand in order.

China
2nd largest exporter of manufactured goods Brazil & India rank 9th& 10th.

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Asian NIC’s manufacturing growth is highest Asian “Tigers”

Largest gains in manufacturing growth:

*South Korea
*Hong Kong – separate political entity from China
*Taiwan
*Singapore
*Malaysia
*Thailand
All have access to Ocean Port shipping for Export

Geographies of Office Employment Decentralization

Back-office functions means rote jobs with job security.
Outsourcing Temporary workers with no rights.
Clusters of specialized offices
Offshore financial centers

Future Geographies
*Availability of resources
*Expansion of world economy
*Globalization of industry

Transportation technologies
*High-speed rail systems
*Smart roads
*Smart cars

GLOBAL GOVERNANCE
One World
A nearly 8 billion souls living on this hurtling through empty space. Many peoples
with different ethnicities, languages, beliefs, religions, traditions, resources, capacities,
knowledge and desires.
 refers to the various intersecting processes that create an international order
 A long history of conflicts but we have nevertheless created a global civilization based on
ever more sophisticated ways of cooperating amongst ourselves.
 The sum of laws, norms, policies, and institutions that define, constitute, and mediate
trans-border relations between states,
cultures, citizens, inter-governmental and non-governmental organizations,and the market.
 A rule-based order with no central authority or government

GOVERNANCE
The governance challenge requires a quantum leap in our ingenuity and our
commitment to one another.

SOLUTIONS
Diplomacy is used to modify the anarchic nature of international relations
1. International agreements
- states that break these rules are called rogue states

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 2. International law
- the collection of rules and regulations that define the
rights and obligations of states

INTERNATIONAL ORGANIZATIONS
1. INTERNATIONAL governmental organizations (IGO)
2. INTERNATIONAL NON-governmental organizations (INGO)

Powers of International Organizations

1. The power of classification
2. The power of creating and fixing meanings
3. The power of diffusing norms and setting standards

ASS:
Identify the roles and functions of the United Nations
What are the challenges of global governance in the 21st century
How is the world governed in the absence of a world govt?