Lesson 3a & 3b measuring globalisation & tn cs and globalisation

Types of measurements for Globalisation such as KOF index and Kearney Index

1. Measuring Globalisation

2. Starter Study this map. Discuss reasons why some places are switched on and others are switched off. How useful is this map for measuring globalisation?

3. Learning Objectives Rank countries according to their level of globalisation. Understand that globalisation can be measured using a range of indicators. Evaluate these indicators and indices.

4. NASA ‘Earth Lights’ World Map

5. A close-up of Europe Jot down what this map actually tells us

6. Measuring Globalisation NASA’s ‘Earth Lights’ map gives a good general picture of: the pattern of urban areas across the globe which countries/continents have access to electricity and can afford to use it to light up their living spaces These are both great indicators of globalisation

7. In pairs – How would you measure a country’s globalised status – i.e. how would you measure globalisation

8. Measuring Globalisation mistakes How would you measure: Wealth Development Would these make good measures of globalisation?

9. Question How would you measure globalisation? Choose 3-5 countries and rank them in order of their level of globalisation, according to some of your own indicators.

10. What measures are considered in globalisation? Social Economic Environmental Political Explain why engagement in these creates a good measure of globalisation

11. KOF vs. AT Kearney – (Composite Measures) Read the extract from the Oxford text book, page 162-3. Copy and complete this table. Explain the reasons for the differences between the country’s scores in figures 1 and 2. Suggest possible reasons why the four separate indicators in Figure 2 show such wildly different rank orders (except Denmark!) Evaluate each index. KOF AT Kearney List of indicators used How is each country‘s rank calculated

12. Consider the methodology of the KOF index . Why do economic indicators often get heavier weightings than cultural or social? Do you agree/disagree with this? Often the smaller countries benefit from the weightings given some would argue it is biased towards them due to the calculations

13. Measuring Globalisation Kearney examines the underlying international trends that reveal whether the world's leading nations are becoming more or less globally connected. Measures 12 variables Broken down into: Political Engagement Countries involvement in international treaties and IGOs Technological connections Number of internet users, hosts and servers Personal Contact Travel & Remittances sent home, phones calls Economic integration Volume of international trade and FDI KOF Measures the three main Economic Cross border transactions ,FDI Social Cross border contacts, telephone calls, letters etc., information flows measures presence of Ikea and McDonalds Political Foreign Embassies, Membership of global groups etc .

14. Other ways to measure globalisation Membership of trade blocs – shows how it trades with over countries (ASEAN, EU) Membership of IGOs – Shows ability to communicate and get involved in global issues (WB, IMF, WTO) Goods and flows; Trade flows; aircraft flows; human flows e.g. migrants

15. A Two-Speed World

16. Learning Objectives Examine the role of TNCs in globalisation. Evaluate the physical, political, economic and environmental reasons behind the unequal spread of globalisation.

17. HOW TNCs Accelerate Globalisation Offshoring When a TNC moves part of its production process to other countries to reduce the costs of labour Can you think of examples of this? Outsourcing When TNCs contract another company to produce the goods and services they need rather than do it for themselves (This results in complex supply chains) Glocalisation Refers to changing the design of products to meet local taste or laws. Development of new markets Helping to switch on new places KEY FACTS

18. Switched Off Places Very poorest nations Not connected Sudan, Chad and parts of Burma whether rural or urban Subsistence farmers rely on OECD and NGOs for relief Farmers may grow for TNC’s but low wages creates no spending power within the country These are the least developed countries (LDCs) The Sahel Region of Africa shows this Consider the reasons why these countries do not attract FDI The Sahel Region is impacted upon by ITCZ (We will study this in later units)

19. Switched Off Places North Korea Take notes Notice the differences in many development and globalisation indicators? Also notice that the literacy rate for North Korea is 100%. Any ideas why?

20. Consider the maps below Why are data cables so important to connect countries?

21. Factors that make a country Switched off Landlocked Politically switched off on purpose Lacks water or natural resources Climate Topography Access Lacks political stability High levels of corruption

22. Analyse the physical and human features of the map of Ethiopia on the next slide Explain why countries such as Ethiopia are often considered switched off from globalisation (6) Analysing Maps

23. Lacks access to the coast – Prevents international trade Sparsely populated mountainous regions Large desert plains which are surrounded by ‘unstable’ countries Being more central there will be much higher temperatures in some regions causing potential natural hazards (drought)

24. Explain why countries such as Ethiopia are often considered switched off from globalisation (6) Ethiopia is landlocked which means it does not have access to ports and therefore trade it also lacks accessibility due to its topography because the capital city is in a mountainous area making it difficult to reach and communities will be isolated therefore lack access to such things as the internet or even electricity Another reason they could be switched off is lack of natural resources, Ethiopia have limited access to resources that they can sell such as oil or natural gas and therefore rely on farming. (BE AWARE – the question uses the term ‘such as’ this is very important as it allows the candidate to talk about other factors that may not always be connected to the resource)

25. TNCs and Globalisation What is a TNC Why do TNCs wish to spread themselves between countries How do TNCs spread their ‘wares’ between countries Using page 158-159 Explain the following terms and why they are important to TNCs: Economies of scale Developing new markets Horizontal Integration Vertical Integration Diversifying their product range What are meant by the terms motive, means and mobility. – write a short summary of each

26. Glocalisation Glocalisation refers to changing the design of products to meet local taste or laws.

27. McDonald's in Madrid, Spain; where you can buy a McChico ? - (A McChicken Sandwich) Spain

28. Greece You can get a "Greek Mac" gyro sandwich-style, in Greece

29. India McDonald's in India offers the Chicken Maharaja and other non-beef burger items (Delhi).

30. 32 Qatar You can get McArabia meal "dressed in Arabic flatbread" in Doha, Qatar.

31. Other Great offerings

32. Question Given these examples by a TNC such as McDonalds why do you feel they use this technique

33. Glocalisation is basic to an organisation’s capability of entering different markets across the globe while ensuring the needs of the local populations are met Examples: Ford builds higher ground clearance trucks for Indian roads  KFC makes spicier chicken for the Indian palette  Gillette makes longer lasting blades for value-conscious India

34. Complete the exam style questions from ‘Week 2’ in your homework booklet. Explain two ways in which TNCs Promote globalisation. (4 marks) Assess the role played by TNCs in the globalisation process. (12 marks) Week 2 Homework Use the extract from the Oxford text book (Pg. 158-160) to help you. Due: One week from today

35. Why do TNCs use glocalisation Can you explain why TNCs consider the following before ‘branding’ their product? Local taste preferences Brand Loyalty Religions Wages Superstitions

36. How do the following lead to glocalisation ? Brand Loyalty Superstitions - Wages People may move from one country to another and wish to purchase the same products. Ever seen the international aisle in the supermarket? Or what about on holiday. Are you more likely to purchase food from Lotteria or Subway if you need a quick bite to eat at the airport? Religions EG. Red is the colour of good luck in China, so red products will sell well. However, red ink is associated with death, so companies should never use red ink on marketing correspondence as a person’s name written in red will upset rather than endear them. Average wages in the country of sale must be considered Products may be sold cheaper in countries with lower wages or different specifications of the same product may be produced. Markets have different requirements EG. Many people in India do not eat beef, so hamburgers may be off the menu for big burger chains. Local taste preferences Different countries eat different staple foods A McDonalds breakfast in the USA comes with hotcakes. - In Mexico it comes with refried beans!

37. Questions Explain 2 ways in which TNCs promote globalisation (4) Assess the role of TNCs in the globalisation process (12)