In this assignment I am going to be examining the impact of economic globalization and position to play off countries or individual countries against one another. I feel this is important because it has been seen that the globalization of the economic life has already proceeded to unprecedented levels and is set to intensify.
The TNCs wish to locate abroad because that is where they are involved in extractive or agriculture, the answer is obvious. They have to be where the oil is extracted, the gold is mined or the pineapple grown. However, the principle reasons for decentralization are secure new markets or to stop their rivals getting there first. The movement of capital away from the USA and Western Europe after the 1970s was also partly to do with the difficulties of securing high profits and subordinating the labour force in the industrialized countries. Many developing countries had abundant supplies of cheap, unorganized labour. The division of labour into more minute skilled and semi-skilled tasks, that allowed untrained or newly trained workers to attain rapidly the levels of productivity in the countries where industry was long established. The poor countries provided freedom from planning and environmental the rise of the transnational corporations on the developing world. The reason for this is because the transnational corporations are able to export jobs to parts of the world where labour costs and workplace obligations are lowest. And because they are in a better control, cheap health and safety standards, tax holidays and other incentives.
TNCs act as a symbolic and practical demonstration of western affluence and ‘freedom’, even if that freedom is sometimes individualistic, consumer led and often destructive of other people’s opportunities. The former communist regimes found themselves particularly vulnerable to the notion that political freedom equated to consumer choice. Dicken (1992) argues that the TNC is the single most important force...
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