Economic Interactions and Flows: Outsourcing

What interests me the most from the Greenfield Geography website, is the "Global Services Location Index" which is about offshoring. In this area of the website, it displays a snapshot of the top countries for offshoring. 

In order for the countries to be considered as a place ideal for offshoring, the country has to be developing, economically, while the level of skill is high, but considered to have cheap service. The top country for offshoring is India, and with China next.
This is evident in many products that we may own, as most of these products were produced in different countries like India and China. Many companies offshore their production to other countries with cheaper service in order to save costs for the business. 

Causes and Effects:

• Offshoring greatly benefits a company as it cuts down greatly on costs
• Allows countries that are developing to develop economically even more, as wealthier countries are offshoring their production, etc. to these countries. 

For example: 

The United States or American companies/businesses offshoring their production to less wealthier or developed countries like India and China. Because of this, it has been stated that there has been a great increase in the economic status of China, therefore it has been a benefit.

However, these American businesses, when offshoring production to countries like China and India, the wages for these workers are often very minimal. Due to this, it is sometimes criticised to be exploiting the population, as the prices these products are sold at, is much much much higher than the wages of the workers.

Question:

Do you think that offshoring is great for these countries, or is this considered to be exploitation of the less wealthier population, as they aren't getting paid as much as they should be (based on the prices the products they produce is sold at, for example, Nike, Apple, etc.)?

Political Outcomes: European Union

Russia to Redirect Trade Elsewhere in Case of EU-US Sanctions

Article: http://rt.com/business/russia-eu-us-sanctions-742/

• European Union and the US are imposing sanctions on Russia due to the conflict between the country and Ukraine. 
• Russia is claiming that "In turn, the EU is Russia’s biggest trade and investment partner, with trade turnover estimated at $330 billion in 2012” and that the introduction of sanctions may lead to a considerable financial losses for the EU.
• The US based companies, such as General Electric and Boeing are very concerned about the planned sanctions, as well as other countries in the EU as they will also be heavily affected. 

Due to the conflicts between Russia and Ukraine, it has caused the US and the European Union to impose sanctions on Russia. However, forcing sanctions on Russia could be detrimental to the European Union as Russia is one of the biggest contributors in the EU. Imposing sanctions on Russia will also affect the countries in the European Union. As seen in the article, Latvia has “so far voiced the biggest concern over sanctions against Russia, as the adverse effect would hit the country the hardest compared to all the EU member states.” It is also said that Latvia’s economy or GDP may go down by at least 10 percent, if sanctions were to be applied on Russia. 

With this, it is shown that imposing sanctions on Russia may affect the European Union countries, but as well as big companies that are tied or are in agreement with Russia as well.

Source: http://rt.com/business/russia-eu-us-sanctions-742/

Socio-Cultural Exchange

Choose either the concept of cultural diffusion (voluntary/consented change in culture) or cultural imperialism (enforced/pressured change in culture) and using specific examples explain how transnational corporations either intentionally or unintentionally spread consumerism through your chosen concept.

Cultural diffusion is the concept of cultural beliefs and activities that spread from one group to another, such as ethnicities, nationalities, religions, etc. and is often due to globalisation; the advance in communication, and technology. 

One of the most common examples of cultural diffusion today is the spread of various foods. A transnational corporation that has aided in spreading consumerism through cultural diffusion is McDonalds. McDonalds is well known for adapting to the cultures and foods of the country their stores may be settled in. By adapting to the culture of others, it allows McDonalds to reach out to more of their consumers. For example, when I visited Hong Kong for vacation a few years ago, my family and I decided to eat at McDonalds, and the menu of the company was completely different compared to the menu that we were familiar with in the Philippines. In order for McDonalds to reach out to their consumers in Hong Kong, they added burgers that were spicy, and fit for the taste of those in the country. Another example, is the McDonalds in the Philippines, that include spaghetti in their menu, however, this cannot be seen in other countries such as the United States. Through this, it is McDonald's way of adapting to the culture of the Philippines, and as well as attracting more of the Filipinos. 

By looking at the McDonald's websites from all over the world, it shows the variety in the menu depending on the country. Not only does the food change according to the country, but as well as the name of McDonalds also change, for example in Australia, they call the store "Maccas". 

The Pros and Cons of Globalisation

Decision Matrix: Pros and Cons of Globalisation
Pros	Cons
Globalisation promotes an economic growth on a global scale. With globalisation, it creates jobs for areas that aren’t as economically developed, allowing them to develop economically. Despite the poor conditions that many may have in China or Vietnam, it allows the country to grow economically as branded companies are hiring workers from these countries to produce the products.	Globalisation has made illicit trade larger, having extreme consequences on the world’s economy such as corruption, and making jobs redundant, resulting in others losing their jobs, for jobs that pay less. For example, in the Philippines, pirated DVDs are being sold, therefore stores that sell original copies of movies aren’t attracting as much customers as before, as there is a cheaper way to purchase movies.
Due to the low cost in labor that some companies may need to pay due to having workers from lower economically developed countries, this allows their products to have a lower cost. This is an advantage to the consumers as some prices of the products may decrease.	Globalisation has led to the exploitation of the poor. Adults and children are constantly exploited and are forced to work in unsafe environments because they are in need for money to support their family. An example would be Nike exploiting their workers, it was said that “it was revealed that workers in one of its contracted factories in Vietnam were being exposed to toxic fumes at up to 177 times the Vietnamese legal limit” (Wazir)
“There is cultural intermingling. Each country is learning more about other cultures.” (Collins) One example would be in the Philippines. Due to the increase in technology and accessibility in transportation, it allows others with different cultures to visit or even migrate to the country. Brent International School is a very diverse school allowing others from different areas of the world to interact with each other and learn their culture.	One of the biggest problems that we face today due to globalisation is that the richer population is becoming increasingly richer while the poor stay poor. While richer families are using globalisation to their advantage by expanding their companies locally or internationally, such as SM and Henry Sy in the Philippines, they are gaining more money. However, it can be argued that the poor do get slightly richer because they are usually working in these companies such as SM. “All of Sy’s businesses employ and exploit contractuals who are made to work hard yet receive meager wages and minimal benefits and have no job security nor union rights to speak of. Contractual salesladies, bank tellers and construction workers – these are the people who contributed immensely to the rise in Sy’s profit” (Olea)
Due to globalisation, transportation is more accessible and interacting with others is easier, therefore shrinking the world. Globalisation allows us to interact with others from different areas of the world, and travel to other countries in a few hours.	Globalisation has created attempting crimes easier through technology. One general example is using social networking websites to obtain information about certain people. Because many are oblivious to the ability many may have from obtaining information on the internet, they will carelessly post their personal information. Therefore others can take their information and use it for crimes, etc.
Poverty reduction: “China: Reform led to the largest poverty reduction in history. Between 1990 and 2005, poverty rates in the country fell from 60% to 16%, leaving 475 million fewer people in poverty.”	As much as globalisation may be an advantage to countries, it can be a disadvantage to other countries as some countries cannot be part of globalisation. “Many countries in Africa have failed to share in the gains of globalisation. Their exports have remained confined to a narrow range of primary commodities.”

Websites Used:

http://www.theguardian.com/world/2001/may/20/burhanwazir.theobserver

http://bulatlat.com/main/2011/09/01/bill-to-protect-workers-against-contractual-employment-filed/

http://www.manufacturing.net/articles/2010/06/the-pros-and-cons-of-globalization