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Global interactions at the local level (10 hours)

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Defining glocalization – Distinguish between the terms globalization and glocalization.

Adoption of globalization – Examine the extent to which commercial activities at a local scale have become globalized. Examine the reasons why the level and rate of adoption varies from place to place.

Local responses to globalization – Discuss civil society responses to globalization; the adoption, adaptation (glocalization) or rejection of globalized goods, services and cultural traits.

Evaluate the relative costs and benefits of local commercial production to the producer, the consumer and the local economy, compared with the costs and benefits of globalized production.

Alternatives – Describe the role of civil societies in raising awareness of local and global environmental, social and cultural issues. Examine the role of civil societies in supporting local economic activity and strengthening local cultural values. Discuss the position held by anti‑globalization groups.

Evaluate the quality of life of a contemporary non‑globalized society.

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IB Global interactions at the local level Word document 1

IB Global interactions at the local level Word document 2

Glocalisation – SLIDESHARE

Glocalisation: The adaptation of a global product for a local market place. The word comes from an amalgamation of the words globalisation and localisation.

Globalisation: The spread of economic, cultural and social ideas across the world.

Localisation: The act of operating locally in terms of employees, product, supply of raw materials, etc.

The aim of nearly all companies is to maximise profits. Therefore TNCs glocalise their products in order to increase market share and increase profits. Other reasons why TNCs may glocalise include:

  • To meet health and safety regulations
  • To meet electrical requirements e.g. voltage, plug type
  • To meet local laws
  • To match availability of components, produce, etc.
  • To meet local customs and tastes e.g. no pork in a Muslim country or beef in an Hindu country
  • To meet socio-economic status of market place
  • To meet local climatic or terrain conditions
  • To match local languages and ideas of acceptability
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MacDonald’s India

 

Most multi-nationals today have to take glocalisation into account when considering expanding beyond the domestic market. They have to translate advertisements or instruction manuals into different languages, have to be aware of the impact of colours or images in their adverts and on their packaging and need to take local laws and regulations into account. One way in which companies must find a way to adapt is with their online presence, meaning that companies now run websites designed for different areas or nations. This affords them the chance to introduce themselves to their markets and gives the customers the feeling that the products or services are really meant for them.

The term ‘glocalisation’ has been applied to a variety of circumstances:
• The process of linking local, regional and global scales
• Using ICT to provide local services on a global or transregional basis. Although the internet has been a key element in the process of globalisation, its role as a localising agent cannot be ignored. More and more web applications have been glocalising their approach to meet consumer demand. Many minority languages have developed their own websites as an important part of maintaining and extending such languages in their home regions. Websites can play an important role in maintaining other aspects of culture as well.
• Individuals, households and organisations maintaining interpersonal social networks combining local and global interactions. With the considerable expansion of
global migration over the last 30 years, diasporas have become signifi cant in many countries.
• Transnational corporations establishing local organisation structures to work more effectively with local cultures. TNCs have come to recognise that a ‘one size fi ts all’ approach has limited appeal in many markets around the world.
• The customisation of global products and services to suit local laws or culture. This can have a major impact on sales due to the importance of ‘product acceptability’ in local communities.
• The declaration of a city or other locality as world territory with responsibilities and rights on a global scale. More and more people at a local level now recognise that their actions can have a global impact

 Quick Restaurant – Halal Burgers (Glocalisation)

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A French fast food restaurant has caused controversy by only selling halal meat (meat that conforms to Islamic requirements) in some of its restaurants. France has a large North African population (many of whom are Muslim) living in its big cities. As such the restaurant “Quick” has decided to adapt to the local market place (glocalise) and sell halal burgers. Quick soon offered halal meat in a further 7 restaurants. All eight restaurants saw sales double and had to add 25% extra staff. Because of the success it announced plans to offer halal meat in a further 22 restaurants.

However, despite the companies success, Quick has come in for some criticism. The Mayor of Roubaix (one of the French towns with a halal restaurant) has complained saying that the restaurant is discriminating against non-Muslims (despite non-halal burgers being reheated and sold (although not prepared) at the restaurant). Others have called for boycotts of restaurants and filed complaints for discrimination.

France has the biggest Muslim minority in Europe, numbering nearly 5 million. Further to introducing halal burgers, Quick removed bacon burgers from nearly all of its restaurants (350) and replaced it with a turkey burger. Some have argued that this is an example of Islamification, others have argued that the protests against the changes are an example of Islamaphobia, while others may argue that it is just a case of glocalisation.

McDonalds (Glocalisation)

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McDonalds is probably one of the best examples of how TNCs adapt their global brand and products to adapt to the local market place. Despite having nearly 70 million customers daily in over 36,000 restaurants in nearly 120 countries worldwide, it is constantly trying to expand and increase its market share. Below is a list of some ways that McDonald’s has adapted its brand and products to increase its market share:

  • In Muslim countries pork has been removed from the menu
  • In Hindu countries beef has been removed from the menu
  • In Muslim countries halal food is used and in Jewish countries kosher food is used
  • Certain local festivals or customs maybe celebrated e.g. during Ramadan in Muslim countries, McDonald’s will offer Iftar buffets at the breaking of fast.
  • The types of burgers/products are changed to local tastes e.g. McRice in Indonesia
  • The number of McCafe’s have been increased in localities with a coffee culture or office workers in a hurry
  • The number of drive-thrus or playgrounds maybe increased in locations with a large numbers of car owners or children
  • In France, Ronald McDonald was replaced by Asterix as the company logo
  • In locations Antigua in Guatemala McDonald’s has changed its store frontage to blend in with local architecture
  • Staff have different uniforms depending on local culture
  • Changing language of menus, signs, etc.

Glocalization: The adaptation of a global product for a local market place. The word comes from an amalgamation of the words globalisation and localisation.

Globalization: The spread of economic, cultural and social ideas across the world.

Localization: The act of operating locally in terms of employees, product, supply of raw materials, etc.

Adoption of globalization

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The adoption of globalisation can be looked at and compared at many different scales include:

  • International
  • Regional i.e. a continent
  • National i.e. within a country
  • Settlement i.e. different areas within a settlement
  • Urban v rural

The adoption of globalisation can be impacted by a number of factors including:

  • Population and market size (threshold population): Many products require a minimum population for them to be offered. If a country or region only has a small population, then less products (especially global brands) will be offered. For example a Starbucks restaurant is not going to open in a small village in the Sahel where most people are mainly subsistence farmers.
  • Government policy and ideology: Some countries like Cuba and North Korea follow Communist ideologies which tend to prevent private ownership and increase self-sufficiency. Both of these factors can create a more isolated and less globalised country. On the other hand countries like the US actively follow Capitalist policies which tends to increase globalisation.
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North Korea – a global black hole

  • Levels of communication (internet, mobile network): Many aspects of globalisation e.g. TV, film, the internet require certain levels of communications. If the infrastructure is not present then not only will less products will be offered, but also less advertised and heard about. For example Walmart are not going to start offering online shopping in the Amazon Rainforest where no one has access to the internet and there are poor transport links.
  • Education level: Areas that have high levels of education tend to be more globalised. This is because global companies have access to better workers, people are likely to have better jobs and therefore more disposable income and are more likely to have heard about global products.
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Lack of education hampers development and global interactions

  • Electricity and Water: Many global companies require reliable water and electricity. A global company is less likely to open if they are constantly suffering from power cuts which might impact production or having to purchase bottles water because of a dirty and unreliable supply of water.
  • Level of development: If a country is relatively poor (near the bottom of the Rostow or Clark model) then people will have smaller disposable incomes so less globalised products and services will be offered. For example in Sierra Leone where GDP per capita is very low, few global brands like Startbucks, GAP or Walmart will be offered.
  • Safety: Countries that are suffering from war or that have high levels of crime (robbery, murder, extortion), etc. will find it hard to attract foreign companies to invest.
  • Sanctions: Countries like Iran, Cuba and North Korea which either have sanctions or embargoes imposed upon them are less likely to be globalised because many global companies will be banned from trading with them.
  • Start-up costs: Countries with a lot of regulations and laws (red tape) are going to be less attractive to global companies because it will increase start-up costs. Also countries with expensive, land, rent, etc. are going to be less attractive.
  • Taxation and protectionism: Some global brands will choose not to locate in countries or regions with very high levels of taxation. This is because it is harder for them to be profitable. In order for them to be profitable their products may be so expensive that they become unattractive. Also countries that have high levels of protectionism e.g. tariffs and quotas are going to be less attractive to global companies.
  • Availability of raw materials: Some global products may not be offered because of a lack of local resources/raw materials. This is less of a problem in our modern globalised world with better transport, but if a supermarket is having to import all of its products it will find it hard to be competitive and profitable and therefore less likely to open.
  • Protests: Some countries may boycott or protest against certain products. For example in Iraq and Afghanistan the local populations may boycott certain US global products because they are unhappy with the on-going occupation.
  • Local culture: Certain products may be unacceptable to certain cultures. For example alcohol, lingerie and betting companies are much less likely to be operating in Muslim countries because they are all Haram.
  • Corruption (Kleptocratic governments): Global brands are unlikely or less likely to locate in countries with high levels of corruption. Afghanistan is meant to be one of the most corrupt countries in the world where bribes are common place, making for a less attractive business environment.

Comparison between two different cities and the level of globalisation

CORE CHARACTERISTICS e.g. Belgium (Brussels) PERIPHERY CHARACTERISTICS e.g. Eritrea (Asmara)
  • Good transport links e.g. International airport, Eurostar, good roads, usually a subway system
  • Good communication networks e.g. broadband internet, mobile phone coverage
  • Reliable electricity, gas and water supplies
  • Large tertiary sector (73% of workers are in the tertiary employment)
  • High GDP per capita ($37600 in 2011)
  • Usually urban areas with net-migration gain (urbanisation) – ‘brain gain’
  • High levels of education and healthcare
  • High levels of FDI
  • High levels of employment
  • Good quality housing and accommodation
  • Large numbers of tourists
  • Cultural diversity (sport, music, religion, language, etc.)
  • Large racial mix
  • Poor transport and communication links. Probably no major airport or airline, poor roads and lack of public transport
  • Very low GDP per capita ($700 in 2011)
  • Large primary sector (80% of workers work in the primary sector)
  • Often rural areas and/or areas that are suffering from net migration loss – ‘brain drain’
  • Poor levels of education and healthcare
  • Unreliable electricity and water supplies
  • Disinvestment and low levels of FDI
  • High levels of unemployment and underemployment
  • Poor quality housing (possibly informal)
  • Traditional society
  • Lack of cultural and leisure facilities

 

Within cities you may find areas that are more or less globalised. Below are some reasons why migrant areas may be more or less globalised.

 

WHY ARE IMMIGRANT AREAS MORE GLOBALISED WHY ARE IMMIGRANT AREAS LESS GLOBALISED
  • Introduction of foreign foods e.g. many cities now have “China Towns”
  • Increased links to friends and families living abroad
  • Financial flows between countries (remittances)
  • Increased variety of culture e.g. sport, music, dance
  • Greater variety of languages spoken
  • An increase in the number of satellite channels
  • Development of local (foreign) businesses maybe offering new and varied products

 

  • High concentration of only one language (immigrant language)
  • High concentration of a certain religion and religious buildings
  • Less global brands. Maybe because the products are unwanted or because of the low socio-economic status of the area
  • Lower socio-economic status so lower disposable income and therefore less likelihood of services like the cinema, theatre being offered
  • Less disposable income might mean there is less access to broadband and mobile networks
  • There may be less variety of sports, music, dance, food, etc.
POSITIVES OF GLOBALISATION NEGATIVES OF GLOBALISATION
  • Increase choice of products
  • Reduced shortages as products can be imported
  • Possibly reduced price of products as countries can specialise in products that they have a competitive advantage in
  • Increased multiculturalism (different foods, languages, music, dance, etc.)
  • Increased trading links and improved relations between countries reducing conflict because of interdependence.
  • Improved levels of technology as the latest products are shared
  • Increased levels of education and skills as people are trained or educated by foreign companies and institutions
  • Increased spread of democracy and human rights (greater quality between different groups and nationalities)
  • Improved medical care as advances in medicine can be shared

 

  • An increase in the number of clone towns (homogenisation of urban landscapes)
  • A loss of local companies
  • Global companies may actually become monopolies reducing choice or increasing prices
  • Workers and/or resources may be exploited by TNCs or foreign countries
  • Cultural dilution (homogenisation). Loss of individual culture e.g. language and food to be replaced by a more international culture (Westernisation?)
  • Possible racial tensions between migrant groups
  • Changes in diet e.g. more fast food leading to obesity
  • Economic leakage (profits disappear overseas to TNC headquarters)
  • Increased dependency of TNCs and foreign countries
  • Increased risk of economic problems due to global recessions
  • Possible environmental damage caused to poorer regions and nations
  • National sovereignty removed by global institutions like the IMF, WTO and EU

Local responses to globalization

Hyperglobalists/Capitalists/Free marketeers: These are people that are all firmly in favour of a free market system with no or very little government intervention. These groups often blame economic problems on too much intervention. For example they would argue that government support for failing companies (e.g. in the UK the government has supported the bank Northern Rock) is going to cause future problems, because they argue that the companies are obviously not profitable and should be allowed to go bankrupt because in order to support them, debt is going to be incurred.

capatilism

Sceptics/Anti-globalists/Communists: People that are opposed to the current system. They may oppose for varying reasons e.g. they want greater government ownership, or less worker and environmental exploitation.

G8

Transformalists/Reformers: They accept the existence of the current globalised system, but would like it altered in some way. This maybe greater government regulation, more stringent environmental controls or greater local production.

There are a number of arguments favouring both globalised and localised production. Below is a summary of some of the main ones.

GLOBALISED PRODUCTION LOCALISED PRODUCTION
ADVANTAGES PRODUCER
  • Can benefit from economies-of scale by producing on a large scale
  • Can source materials from the cheapest locations

 

  • Reduced transportation costs as products are purchased and sold locally
  • Can operate just-in-time production much easier because suppliers and customers are closer

 

DISADVANTAGES PRODUCER
  • There may be higher transportation costs both in transporting raw materials and the finished products
  • Maybe harder and slower to change, to changes in demand
  • Many customers are now demanding local products
  • It is harder to ensure quality when production is outsourced or offshored
  • May have problems sourcing raw materials locally
  • Local workers may not have the required levels of skill or education
  • Restaurants and food producers will have to change their menus or products according to the seasons

 

ADVANTAGES CONSUMER
  • There is more choice of products e.g. peppers and pineapples in the UK
  • Mass production may mean that prices are lower
  • Perishable goods (food) are offered all year around

 

  • Perishable products (food) will be fresh and in season. Local products should be riper and have more flavour
  • Products should meet local customs
  • Should be more suited to personal tastes and traditions
DISADVANTAGES CONSUMER
  • There is less choice and products are homogenised/standardised
  • Prices may actually increase if a monopoly exists
  • It is harder to know the source and quality of products that you are buying
  • Perishable goods may have been grown using chemicals and picked unripe so have less flavour
  • They may suffer from pollution caused by large scale production and transportation
  • Perishable products are not available all season
  • Some products maybe more expensive because they are produced on a smaller scale
  • There may actually be less choice because there are few local companies

 

ADVANTAGES LOCAL ECONOMY
  • Some local companies may become suppliers to global chains
  • Local businesses may benefit from improved levels of technology
  • Global companies will train staff with new skills
  • Improved trading relations with other regions and countries

 

  • Local workers are employed who pay local taxes
  • There is less economic leakage
  • Local workers learn new skills which can be passed to other manufacturers
  • Positive multiplier effect as suppliers, etc. benefit from increased custom

 

DISADVANTAGES LOCAL ECONOMY
  • Local producers may not be able to compete on price and be forced to close
  • Many managerial positions maybe filled by expatriates (foreigners)
  • There is often economic leakage from the area (profits repatriated)

 

  • Small local companies don’t pay as much in tax because of their scale
  • Small companies will probably employ few people and buy less products
  • Local companies may be exploited (low prices)
  • Local companies take risk and may incur debt

Civil Society: Any organisation or movement that works in the area between the household, the private sector and the state to negotiate matters of public concern.

Trade Union: An organisation where workers have grouped together in order to achieve common goals. This might be improved pay, better safety, longer holidays, protection from lawsuits, etc.

Faith Based Organisation: A group that is based on certain religious beliefs. Faith based organisations like Christian Aid may have certain beliefs, but it doesn’t necessarily stop them from supporting people with alternative beliefs. For example an NGO (charity) like Christian Aid will help anyone in need and not discriminate based on religion.

Community Group: Organisation based in local areas. Community groups may provide local services like handing out food to the elderly or running sports clubs for children. They may also campaign on local issues like industrial pollution.

Anti-globalists: Groups that are critical of the current capitalist globalised system.

People’s Global Action (PGA)

zapa

This is the name given to the coordination of anti-globalisation groups around the world. The name came about in the Mexican state of Chiapas during a grassroots uprising in 1996. The Zapatista’s leading the uprising called for a meeting, that was eventually attended by over 6,000 people from over 40 countries. At the meeting they declared that they would form a group to fight against neo-liberalism. In February 1998 organisations from around the world attended a meeting in Geneva where they arranged protests against the WTO and G8. The PGA has held further meetings in India and Bolivia.

Although the PGA is not an organisation and has no members it does help with coordination, some fundraising, arranging conferences, fostering support and highlighting current issues. Their collective manifesto includes the following issues:

  • Exploitation of labour
  • Gender oppression
  • Indigenous rights
  • Oppression of ethnic groups
  • Environmental damage caused by agro-industrialisation
  • Education
  • Protecting culture
  • Militarisation
  • Migrant rights
  • Globalisation and economic power

 Alternatives

“The Amish, despite their resilience, will be unable to resist the spread of globalization”. To what extent do you agree with this statement? [10]

amish 2

The Amish group are a Christian group believed to have been formed by a schism (disagreement) in an Anabaptist group in Switzerland in 1693. In the 18th Century members migrated to the US. The largest Amish communities are now found in the US and Canada. In the US the largest population is in Ohio where there are about 55,000, followed by Pennsylvania where there are about 51,000 – in total the Amish are believed to number over 250,000. The Amish population is growing fast (4% per annum between 1992 and 2010). The many reason for this is the very high fertility rate of 6.8 (remember the replacement rate is about 2.1).

amish

The Amish normally pray in families and not churches. Congregation are based on location. Each congregation normally has about 25 families. Prayer meetings are held in different houses on a rotating basis. Members are normally baptised between the ages of 16-25 and are encouraged to marry within the Amish community. Family groups are very common within the Amish community. Elderly members are cared for within the family and also corporal punishment is handed out within the family.

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