Geography Reference
In-Depth Information
Globalization
A seemingly opposite idea from that of local industrial districts and flexibility of
operation is the concept of globalization: the expansion of systems of production
and consumption to a world scale, exceeding that of any nation or other political
unit. In fact the two are related, through the use of common devices for
organizing the economy, as will be shown. But we begin by examining the
phenomenon of globalization in general, as a major trend affecting even the most
remote regions of each country.
For the geographer, there are several important questions about this
phenomenon. What is the extent of globalization? Is it a real process, or merely
an apparent one related to the pre-eminence of a few great firms, and their
strength in marketing their own images and symbols? Secondly, if it is real, what
are the reasons for the success of the global firm, and what advantages are reaped
by it? Thirdly, what are the relations between the global firm and the locality? Is
the global firm anti-local, and a threat to the locality or even the nation? Or does
the global firm combine with the local and support it?
Another set of questions is posed at an even more fundamental level. Does
globalization mean the end of geographical variation, the end of geography? If
global firms standardize across all kinds of national and regional boundaries,
what need is there to consider local markets and local preferences in production
or consumption? If globalization means standardization, it may be posited that
there is no need to consider regional problems at all, as they cease to exist
through the permeation of all regions by the global economy.
Global and local
From the 1970s, some observers saw a change in the nature of the large
corporations active in many countries. This change is encapsulated in the terms
multinational corporation (MNC) and transnational corporation (TNC) (Allen
1995). Multinational companies have existed for a long time, going back to the
time of the merchant adventurers organized in Spain, Italy, Britain and Holland
in the seventeenth century. These companies were engaged in the control of trade
between colonies and mother countries, but were also involved in the production
of raw materials such as sugar-cane, cocoa and spices in the colonial territories.
Modern multinationals typically have operations in various countries and for
various purposes, such as extraction of raw materials, processing of foodstuffs,
or the assembly of manufactured goods. They have, however, a firm home base
in a mother country, where the administration and control of the company is
maintained. Operations outside this country are hierarchically controlled from
the centre, which is also likely to have important functions such as design and
research, in the case of manufacturing companies. This is still a prominent
format for the large international company, although there are variations and
hybrids between it and more recent forms.
