Globalization has led to increased economic integration around the world as large multinational corporations seek to expand into new markets and reduce costs. However, this has also created conflicts between the interests of powerful transnational companies and national governments, as well as risks of growing inequality and environmental degradation if not properly managed. For small countries like New Zealand, it means management decisions may increasingly be made offshore and local communities could be affected.

1. Globalisation . . is not a serious idea. We, the
Americans invented it as means of concealing our
policy of economic penetration into other nations’
J.K. Galbraith 1970

2. By the end of this class you will have had the
opportunity to:
 Consider the emergence of globalisation
 Consider the implications of globalisation
 Consider the implications for small countries such as
Aotearoa New Zealand

3. Those who do not read and understand history
are doomed to repeat it." - Harry Truman
History never repeats itself. Man always does."
— Voltaire

4. Globalisation
What do we mean by globalisation?
Why and how has globalisation occurred?
What are the characteristics of globalisation?
Who are the ‘globalisers’? How do they spread their
ideas?

5. For those who want to know more…
seek out….
Guns, Germs and Steel by Jarred Diamond
Climate Wars by Gwynne Dyer
Look up: Blue Gold: World Water Wars PBS videos

6. History first: Imperialism, empires and
globalisation
Imperialism : The policy of extending a nation's authority
by territorial acquisition or by the establishment of
economic and political hegemony over other nations.

Development of monopoly capitalism
Industrial capitalism and banking
Export of investment from the centre (USA) to the
periphery
Control of foreign markets
An example: the British empire

7. Pax Americana.
Globalisation: In this modern sense, the term has come to
indicate the military and economic reach of the United States in
relation to other nations
So is globalisation a form of ‘Americanisation’? Or more?

8. What do we mean by globalisation?
‘Business without borders’, unhindered by national
boundaries, .
The ‘Americanisation’ of the world? American products, designs
and politics dominating the world ( the ‘new’ empire?’)
The Transnational franchisders: McDonalds, KFC, Starbucks,
Dunkin Donuts, Disney, Sky, CNN, GM, GE, Apple, Microsoft,
Levis, the Oscars, CSR, Oprah, Letterman and on and on
American values, products, and debt are being globalised ($1.4
trillion 2009)
Backed by immense military might e.g Libya, Iraq, Afghanistan
and on and on…

9. The financial cost of the Iraq war to the American
people but what about the cost to the Iraqi people?
 March 16, 2003 Meet the Press interview of Vice President
Dick Cheney reported that "every analysis said this war itself would
cost about $80 billion, recovery of Baghdad, perhaps of Iraq, about $10
billion per year. We should expect as American citizens that this
would cost at least $100 billion for a two-year involvement.". [3]
 . As of February 2010, around $704 billion had been spent
 To whom did this vast sum of money go? Halliburtan
 http://www.boston.com/news/world/articles/2008/03/06/top_iraq_co
ntractor_skirts_us_taxes_offshore/

10. American arms suppliers in Iraq
 A = nuclear program, B = bioweapons program, C = chemical weapons
program, R = rocket program, K = conventional weapons, military
logistics, supplies
 1 Honeywell (R, K) 2 Spectra Physics (K) 3 Semetex (R) 4 TI
Coating (A, K) 5 Unisys (A, K) 6 Sperry Corp. (R, K) 7 Tektronix (R,
A) 8 Rockwell (K) 9 Leybold Vacuum Systems (A) 10 Finnigan-
MAT-US (A) 11 Hewlett-Packard (A, R, K) 12 Dupont (A) 13
Eastman Kodak (R) 14 American Type Culture Collection (B) 15
Alcolac International (C) 16 Consarc (A) 17 Carl Zeiss - U.S (K) 18
Cerberus (LTD) (A) 19 Electronic Associates (R) 20 International
Computer Systems (A, R, K) 21 Bechtel (K) 22 EZ Logic Data
Systems, Inc. (R) 23 Canberra Industries Inc. (A) 24 Axel Electronics
Inc. (A)

11. (cont)
International activities which enable firms to enter
new markets, exploit technological and organisational
advantages as well as reducing business costs and
risks, and achieving increased economic integration
of their activates.
Examples: Fisher & Paykel, Haier, Lenova

12. Why do organisations want to
globalise?
Economies of scale
Economies of scope
Cutting cost of resources

13. Economies of scale and scope
Economies of scale have meant that volumes
produced at home far exceed the sales that companies
can achieve at home, forcing them to go international
Opportunities exist for economies of scope through
worldwide communication and transportation
networks. e.g. DHL
 Trading companies handling the products of many
companies can achieve greater sales and lower unit
costs

14. Reducing costs
Getting access to cheap resources (see China Blue)
Transnationals need more than simply lower labour
costs; they need access to markets e.g. Asia’s growing
middle class
China and India have a potential market of 2.4b
Access to technology

15. Major issues
Relationships – and conflict - between states – Iraq and USA,
India and China
Sustainability as nations develop on the back of fossil fuels e.g.
China
China’s appetite for resources driving up world prices and itrs
global search for resources
Developed nations ‘outsourced’ their pollution e.g. waste plastic
back to China
Changing peoples’ perceptions of who they are; ‘guest workers’
in the Middle East to illegal Latino immigrants in USA
Managing displaced workers and their families e.g. Afghans in
Pakistan
Leading to multiculturalism of organisations and communities
New challenges and opportunities for the ‘global manager’

16. Conflicts between transnationals and nations
Transnationals want:
Unrestricted access to resources and markets
Control of all aspects of the firm on a worldwide basis
Maximise shareholder value and minimise taxes
Establishing headquarters in low-tax havens
Light regulatory frameworks and minimal government
expenditures i.e. low taxes needed

17. (Cont)
Think in terms of global competitiveness
Expect governments to offer grants and subsidies for
their investment
Governments to cover the costs of basic
infrastructure they need; R & D, universities,
communication , transportation networks etc
Look for tax incentives
Privileged access to domestic markets via public
contracts eg. Health, telecommunications
Industrial policies that suit them e.g. labour laws

18. Democratic governments want:
To be re-elected!
Electors look for lower taxes while still wanting more
social services e.g. Health spending
Strong economies and sound stream of tax revenue
Want external sources of investment, technology and
knowledge which transnational's can supply to create
global competitiveness in the national economy.
Want transnational's to increase the extent of their
local activities

19. The conflict?
 There are no allies in business, just interests
 Many transnationals are far richer and have more power than small
national governments
 Exxon Mobils 2007 profit: $25.3 bn
 2011: $41.1 Billion buut pays estimated 17.6 Percent tax rate
 e.g. poor Pacific states such as Pulau and investment from Taiwan,
Japan’s bribery of Pacific nations regarding whaling and China’s aid to
Africa

20. Where are we going?
As the rich get rich, the poor….
Growing inequality gap between rich and poor
Failure of ‘trickle down’ theories
International capital chasing bigger profits at the expense
of?
The illogic of it; exporting pollution to poorer countries
which degrade the environment which proves increasingly
expensive to try to alleviate
Where does this leave managers with regards to
sustainability, ethics and corporate social responsibility?

21. (cont)
A self-defeating ‘merry-go-round’
China today, Bangladesh tomorrow and then?
Speculation, greed and over-heated economies such
as China drive up the price for resources, which
means western consumers cut back, leading to lower
production in China, rising unemployment and civil
chaos and disorder?
Undermining of national governments

22. What does this suggest for New
Zealand management?
Centralisation of strategies and policies ‘off-shore’ e.g.
BNZ
Important management decisions taken off-shore
New Zealand small, regional outpost e.g banking
Globalisation of ideas and practices
A new breed of manager? Have skills will travel.
Affect on local communities whether in New Zealand or
China?