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

7. 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

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

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

10. 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.

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

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

13. • 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

14. 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.

15. 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

16. A Two-Speed World

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

18. HOW TNCs Accelerate Globalisation
1. 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?
2. 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)
3. Glocalisation
– Refers to changing the design of products to meet local taste or laws.
4. Development of new markets
– Helping to switch on new places

19. 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

20. 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?

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

22. 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

23. 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

25. 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)

26. 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)

27. 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

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

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

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

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

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

33. Other Great offerings

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

35. • 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

36. 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

37. 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!

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