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1 C/W Qu: How have TNCs helped shrink the world? 1/3/17 Aim: To outline the role of TNCs in contributing to the spread of globalisation how they have grown by taking advantage of economic liberalisation. Starter: Watch this clip then answer the following Qs: 1. How many of the featured products have you had/used in the last month? 2. Waynes World came out in How have Reebok remained competitive in the 25 years since the film was released? Global production networks, offshoring, outsourcing, development of new markets 3. What key term from a previous lesson explains how these TNCs are able to operate globally? Think WTO or China post 1978 Economic Liberalisation 4. Can you think of any ways these 'American' products have been adapted to cater for the local UK market?

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3 Context This lesson serves as an introduction to the role of transnational corporations in shrinking the world. TNCs contribute to the spread of globalisation creating global production networks and developing new markets and take advantage of economic liberalisation to outsource and offshore different stages of production. Understanding financial flows is crucial to understanding globalisation, and TNCs are said to be the key players or architects, of economic globalisation. TNCs are firms that have co ordinated operations in more than one country. The last century has seen a significant change in the geography of TNCs improvements in transport and infrastructure have led to the development of global production networks and a new international spatial division of labour. Offshoring and outsourcing are terms used to describe the way that TNCs move sectors of their business abroad. TNCs are central players in the globalisation game, and this lesson serves as an introduction to their structure and organisation. You also need to start evaluating the impacts of globalisation questioning the extent to which global culture is increasingly homogenised; the term glocalisation is used to describe a global product that has been adapted to suit local tastes. It could be said, therefore, that cultural diffusion is a two way process; it is too simplistic to say that globalisation rides roughshod over local culture, and it may be more accurate to say that globalisation is creating something new: a cultural hybrid.

4 How TNCs have contributed to the spread of Globalisation

5 Global Production Networks The goods we buy are now the end product of a complex, global supply network where component parts are sourced and made in many different countries. The BMW mini, for example, uses components supplied by 2,500 different companies across several continents. Product chains are now so globally intertwined that an event in one part of the world can effect the supply of goods being sold somewhere else.

6 Watch the first two minutes of this clip

7 Glocalisation Where a TNC adapts its product to local cultures and markets. Some global brands no longer have fully 'global' products. In this way, rather than globalisation simply homogenising the world, it actually creates a wave of 'cultural hybrids'. Note that for some products thisnis not necessary as it is the global appeal that is the selling point e.g. coca cola.

8 6CNg dov0

9 Development of New Markets As LEDCs/NICs develop, the number of middle class people there rises. This opens up new markets that allow TNCs to keep making profits but also spread their products to previously untapped parts of the world and hence spread globalisation

10 Watch this clip about the recent growth of the Chinese wine industry. Listen carefully to the reason the grower gives for the increased demand. 8:30 10:30 Watch this clip about rising middles classes and increased car ownership in China. This represents a huge new market for TNCs and will further spread globalisation as people there desire Western products as a sign of wealth and how 'westernised' they have become. Both these clips illustrate the new spending power of the Chinese middle classes. This pattern is replicated in other NICs and provides new markets for TNCs and increases the spread of globalisation.

11 How TNCs have grown by taking advantage of Economic Liberalisation

12 Outsourcing Where a TNC gets another company, in another country, to fulfill a job for them. This could be a customer service call center, for a UK firm running in India, and operated by an Indian firm. It could be a Chinese firm making component parts to supply to Nike for your trainers. In short, many TNCs now don't actually make all of their own products or provide all of the services that are provided under their company name.

13 Is this outsourcing? Not really...

14 Watch and get down the 5 reasons why companies outsource

15 Offshoring Where a TNC moves its production overseas but still owns/runs the factory. A good example is Nissan in the UK that you studied 3 lessons ago. This is either done to save money on wages, move closer to markets or to bypass trading bloc tariffs.

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17 Outsourcing and offshoring brought together Watch from 1:00 3:30 for an explanation of why TNCs and national government ideologies clash (Obama vs Steve Jobs)

18 All of this is of course enabled by the trade liberalisation enforced by the

19 Activities: Hodder Pgs Sub title: How TNCs have grown by taking advantage of Economic Liberalisation 1. In what way are TNCs the 'architects' of globalisation? 2. How do TNCs bolt together different economies and societies? 3. To build their global businesses, TNCs operate by offshoring and outsourcing. Outline the difference between these two strategies. 4. Using China's SEZs as an example, how has trade liberalisation helped TNCs to grow. Sub title: How TNCs have contributed to the spread of Globalisation 5. Outline what Global Production Networks (GPN) are and how they operate. 6. Use Fig to outline the difference between a traditional TNC spatial division of labour and a GPN. 7. Give a named example of a TNC using a GPN. 8. How can outsourcing and GPNs cause problems for TNCs? 9. What is meant by 'the development of new markets' and why are they of interest to TNCs? 10. What is 'glocalisation'? 11. What geographical variations mean glocalisation makes business sense? 12. Why don't all companies need to 'glocalise' their products? Use Lego as a named example. 13. Choose either Disney or McDonalds to give a named example of glocalisation Extension 14. Oxford pg 158/159: a.) How is the location of the world's top TNCs changing? b.) Why are TNCs vital to the spread of globalisation? c.) Outline the three factors that have led to the expansion of TNCs 15. Pearson pg 185 outline the pros and cons of TNCs on host countries

20 Plenary Aim: To outline the role of TNCs in contributing to the spread of globalisation how they have grown by taking advantage of economic liberalisation. How TNCs have contributed to the spread of globalisation: Pick a colour GPNs Glocalisation New Markets How TNCs have taken advantage of economic liberalisation: Outsourcing Offshoring Exam Focus: "Outline the role of TNCs in the spread of globalisation." [6]

21 Activities: Hodder Pgs Underline key terms as you go Sub title: How TNCs have grown by taking advantage of Economic Liberalisation 1. In what way are TNCs the 'architects' of globalisation? 2. How do TNCs bolt together different economies and societies? 3. To build their global businesses, TNCs operate by offshoring and outsourcing. Outline the difference between these two strategies. 4. Using China's SEZs as an example, how has trade liberalisation helped TNCs to grow. Sub title: How TNCs have contributed to the spread of Globalisation 5. Outline what Global Production Networks (GPN) are and how they operate. 6. Use Fig to outline the difference between a traditional TNC spatial division of labour and a GPN. 7. Give a named example of a TNC using a GPN. 8. How can outsourcing and GPNs cause problems for TNCs? 9. What is meant by 'the development of new markets' and why are they of interest to TNCs? 10. What is 'glocalisation'? 11. What geographical variations mean glocalisation makes business sense? 12. Why don't all companies need to 'glocalise' their products? Use Lego as a named example. 13. Choose either Disney or McDonalds to give a named example of glocalisation Extension 14. Oxford pg 158/159: a.) How is the location of the world's top TNCs changing? b.) Why are TNCs vital to the spread of globalisation? c.) Outline the three factors that have led to the expansion of TNCs 15. Pearson pg 185 outline the pros and cons of TNCs on host countries

22 Activities: Hodder Pgs Underline key terms as you go Sub title: How TNCs have grown by taking advantage of Economic Liberalisation 1. In what way are TNCs the 'architects' of globalisation? 2. How do TNCs bolt together different economies and societies? 3. To build their global businesses, TNCs operate by offshoring and outsourcing. Outline the difference between these two strategies. 4. Using China's SEZs as an example, how has trade liberalisation helped TNCs to grow. Sub title: How TNCs have contributed to the spread of Globalisation 5. Outline what Global Production Networks (GPN) are and how they operate. 6. Use Fig to outline the difference between a traditional TNC spatial division of labour and a GPN. 7. Give a named example of a TNC using a GPN. 8. How can outsourcing and GPNs cause problems for TNCs? 9. What is meant by 'the development of new markets' and why are they of interest to TNCs? 10. What is 'glocalisation'? 11. What geographical variations mean glocalisation makes business sense? 12. Why don't all companies need to 'glocalise' their products? Use Lego as a named example. 13. Choose either Disney or McDonalds to give a named example of glocalisation Extension 14. Oxford pg 158/159: a.) How is the location of the world's top TNCs changing? b.) Why are TNCs vital to the spread of globalisation? c.) Outline the three factors that have led to the expansion of TNCs 15. Pearson pg 185 outline the pros and cons of TNCs on host countries

23 Attachments method_2016.pdf