Economic and Cultural Impacts of Globalisation

Economic Impacts

• Business is no longer confined to national boundaries.

• Businesses can produce and sell goods overseas.

• This has lead to the formation of Transnational Corporations (TNC) and international organisations.

TNCs

• There are different types of TNCs– Retail chains: e.g.– Oil Producers: e.g.– Car Manufacturers: e.g.– Sportswear/Fashion Makers: e.g.– Takeaway Food Outlets: e.g.

TNCs in Developing CountriesPros for TNC Pros for Developing

CountriesCons

Access to Natural Resources

Lower Labour Costs

Cheaper Land

Increased Employment

Opportunities

Increased Standard of Living

Improved Expertise and

Access to Technology

Sweatshop Use

Damage to the Environment via

Logging & Mining

Improper Waste Disposal

Sweatshops

• Sweatshops are characterised by long work hours, extreme conditions (e.g. heat) and low wages.

• Sweatshop workers are usually employed by companies that TNCs purchase goods off not the TNCs themselves.

• NGOs/activists use the internet to protest against the use of sweatshops.

Nike Sweatshops in China

Sweatshops

• The UN has identified 5 key responsibilities for TNCs:

1. Do not use compulsory labour2. Respect the rights of children to be protected

from economic exploitation3. Provide a safe work environment4. Pay workers enough to ensure adequate

standard of living5. Recognise the rights of employees to join unions

International Organisations

• A number of organisations oversee the flow of goods and services internationally:– World Trade Organisation (WTO):

enforce trade agreements. Has 150 country members. Accounts for 97% of world trade.

– International Monetary Fund (IMF): monitors the value of different countries money e.g. exchange rates and balance of payments.

Big Mac Index

Cultural Impacts

• The world is becoming interconnected but also more standardised (or westernised).

• Cultures (languages, beliefs, customs and traditions) are being changed or lost due to:– Trade– Migration– Tourism– ICT– Media

What Makes You Say ThatStudents:a) Record what you see

(exactly, don’t make assumptions)

b) Record what the things you see mean in your opinion

c) What makes you say that? (Justify your responses)

McDonaldisation

• Refers to the standardisation of a product.• It means that no matter where you are in the

world you can expect a standard from a product.

Language

• There are 7000 languages spoken world wide but every year 25 languages die.

• English has replaced many languages and this is likely to increase rapidly as English is prominently used on the internet.

• By 2050 approximately half the world will be able to speak English.

Media

• The same newspapers, magazines, books, shows, music, movies and video games can be accessed world wide.

• Most are developed in the USA or Great Britain.

• There are some prominent TNCs that control the media such as Time Warner, Walt Disney and News Corp.

Media

• The internet has allowed us to participate instead of just being a spectator e.g.

• This is known as social media.• Some countries have banned social networking in

order to control their people i.e. Iran and China

Media

• There are some signs of reverting back to local and national media.

• 20% more listeners are accessing community radio since 2004.

• The most common reasons:– To hear specialist radio programs– Get local news and information– Listen to Australian music– Support local artists