Globalisation: The Food Industry In Philippines

Globalisation: The Food Industry In Philippines This study aims to explore how globalization has affected the food industry in the Philippines. By looking at the Nestle Company, the research paper seeks to look at Multinationals as agents of globalization and how they have affected the Philippines food industry. Research design/methodology: This study employs descriptive research method. This type of research approach involves data analysis, and a particular set of questions, which do not deflect certain topics. The researcher analyzed the data presented on the impacts of Nestle in the food industry in Philippines guided by specific designed questions. Findings: The study found out that Multinationals act as agents of globalization. By looking into the Nestlà © Company, the research found out that Multinationals act as agents of globalization affecting the food industry both negatively and positively. Limitations: The research employs primary and secondary data hence it would be difficult to find out whether the data is true or biased. Recommendations: In order to reach a generalized conclusion, more study needs to be conducted in this unexplored area of study. Value: Considering the rise of Multinationals, the paper will assist governments to be able to implement proper policies while dealing with Multinationals in their nation states. Key words:-MNC (Multinational Corporations), globalization, socialization, colonization, third world countries. Table of Contents Table of Contents 3 Introduction, Aims and Objectives, Research Questions and Hypothesis 4 1.1 Introduction 4 1.2 Overall Aims and Objectives of the research 9 1.3 Hypotheses: 10 Chapter 2: Literature Review 11 2.1 Introduction 11 2.1.1 Theory 11 Chapter 3: Methodology 21 3.1 Introduction 21 3.1 Research Design 22 Chapter 4: Data presentation, Evidence, Analysis and discussion 26 4.1 Introduction 26 4.2 Data analysis 26 4.2.1 T-Test Analysis 27 Chapter 5: Conclusion 33 5.5 Conclusion 33 5.4 Limitations of the study 35 5.6 Recommendations 35 Time Scale and plan 36 Questionnaire 38 List of References 42 Chapter One Introduction, Aims and Objectives, Research Questions and Hypothesis 1.1 Introduction This research paper is designed to assess the effects of globalization on the food industry in the Philippines. It is motivated by the controversies that have surfaced on the role of these Multinational Corporations (MNCs) as agents of globalization in the Philippines. Globalization has resulted in a lot of positive and negative impacts especially in the third world countries (Robertson, 1992). In the sector of agriculture, crops that have been imported can be bought at cheaper price than domestic products. Nations states like the Philippines, which depend on agriculture as their main export and import have suffered a lot as a result of globalization. The Philippine agricultural sector only accounts for 14.8% of the gross domestic product (GDP) (Frost, 2003). For instance, crops that are imported could be bought at a much cheaper price than value. This is because globalization has created the free trade area as stated by the World Trade Organizations. Hence, nation states with higher productivity in agriculture could dump their produce to their counterparts in the third world nation state. This means that the third world nation states will be given sub standard produce (Frost, 2003). By definition, globalization implies the movement of information and people across borders of any nation state. Consequently, this transfer has control over the nation-states political, environmental and cultural affairs (Dasgupta, 2004). Economically, globalization has been able to assist nation states to grow through the introduction of various Multinational Corporations like the Nestle. As a result, these foreign direct investments bring a lot of foreign exchange in the host nation state. This foreign exchange comes from the sell of Philippines agricultural produce and products in the international market. This is a positive effect in the economy of the nation state. However, in many Asian nation states like the Philippines, majority of the population are plagued with poverty. This means that these people are more willing to work and earn the lower wages that the MNCs (Multinational Corporations) would give them. As a result of globalization, many multinational corporations have set up their branches in these nation states. MNCs (Multinational Corporations) like Nestles have managed to set up their manufacturing facilities in these nation states to benefit from the cheap labor (Jensen, 2008). This has affected the food industry in the Philippines as many local food industries are able to access cheap labor for their industries. The new industries assist the poor nation states to solve their crisis of unemployment thus reducing poverty in the nation-state. In addition, this may help in increasing the living standard of the people and increasing the contribution that the lower class in the society makes in their GDP (Frost, 2003). This ensures that the local farmers are empowered from their agricultural products thus developing food industries in the Philippines. Furthermore, lower class is socialized to be able to consume the products produced by these multinational companies. This creates local market for the products from the food industries thus generating income (Robertson, 1992). Consequently, Nestle has become very significant in building a Food industry in the Philippines. From a negative perspective, globalization has resulted in Multinational Companies like the Nestle that tend to exploit their workers. This is especially in the poor nation states like the Philippines. This is mainly because such nation-states lack proper policies and regulations to ensure that the MNCs act accordingly (Jensen, 2008). This affects the local food industry because the domestic food industries are not able to maximize on the Philippine market like their international counterparts. Most Multi nationals aim at reducing their expenditure costs while remaining competitive to the domestic market. Furthermore, most of these MNCs destroy the environment in the host countries because of lack of proper environmental policies (Athukoralge, 2007). For instance, in the fiscal year 1980, a US chemical business Union Carbide in India endured very poor working environment. The chemicals in the end resulted in explosions that killed very many people (Athukoralge, 2007). These companies seek to not only capture but also to control the resources of the host nation state. This affects the food industry because the destruction of the environment leads to the destruction of food crops and the amount of rainfall that may come in the Philippines. Consequently, this reduces the crop yields of that year. With this background, it is imperative to note that this research will employ Nestle, to depict the impact of globalization in the food industry in Philippines. The research will look into both the harmful and positive characteristics of globalization by looking into Nestlà ©s affairs in the Philippines (Nestle Philippines, 2011). Presently, the Nestle is known as a very established organization globally. The company has various food and beverages amongst its list of products. Past cases will be employed to depict the impact that globalization has in the Philippines food industry. Background The economy of Philippines heavily depends on agriculture for survival. The country of Philippines has a high level of education and literacy rate. The economy of the Philippines is relatively strong with moderate savings rates. It has been ranked as the 46th nation state globally economic wise. Additionally, the nation state has an export oriented agricultural sector (Nestle Philippines, 2011). Consequently, this has resulted in the generation of sufficient foreign exchange for the economy. Despite the fact that it was rich in natural resources, the economy of Philippines is agrarian and produces staple food to support the economy. However, the country had started growing economically with the entry of major corporations like Nestle. The Philippians industrial sector was increasing at a very fast pace. Consequently, the nation state was named as one of the nations with the utmost salary earnings in the Southeastern part of Asia (Divina Roldan, 2010). Many changes in the Philippines have been brought about because of globalization. Furthermore, globalization through MNCs has brought vast penetration of technologies and vast penetration. This has affected the food industry as more farmers are able to venture in the food industry availing more products to the consumers. The Nestle Company began from a simple idea into a giant multinational corporation. In 1866, a pharmacist named Henri formulated a food formula for babies who could not be able to tolerate breast milk. As a result, the products became so successful that the entire Europe demanded for the product (Nestle Philippines, 2011). Because of the popularity, great companies desired to merge with it. Between 1866 and 1947, the company had changed its name severally to suit the mergers. For instance, in 1905, a company named Farine Lactee Henri Nestle and Anglo-Swiss condensed milk Co merged with Nestle to create Nestle Anglo-Swiss Condensed Milk Co. These consolidations permit a company to improve on the efficiency of production through scale economies. In addition, these mergers result in the closing down of firms that are less efficient. This is normally seen as a very fast way for companies to expand on their product offering and in turn gain market share. Furthermore, some companies engage in mergers and acquisitions to block other companies from becoming greater players in the market. Most of the food manufacturers enter the foreign markets through foreign direct investments like in the Philippines. The Nestle Company has been able to stay successful for a very long time. Consequently, this has created room for them to be able to expand their markets globally making them the worlds greatest beverage and food industry (Schwarz, 2003). The Nestle Company has made the food industry to orient itself more to its customers rather than themselves. The advanced technology has enabled them to know the interests of the consumers and thus make products that can suit their needs. Agricultural goods like spoilt milk that could not be used has now been turned into a tradable substance because of globalization. Their headquarters is locates in Vevey, Switzerland (Nestle Philippines, 2011). However, most of the companys industries are located in many parts of the world. Since the publication of the companys case in 1998, Nestle has, managed to employ nearly 230000 people worldwide. Currently, the number has increased to 253000 people and over 88 billion dollars of sales. This means that the com pany is increasing on an annual basis. Additionally, the company has managed to increase their products that they offer to their customers. Their business strategy has been mainly to encourage the growth of their products through various innovations and renovations. Consequently, the strategy has enabled the company to be able to create many other products like breakfast cereal, baby food, dairy products, chocolates, ice creams, prepared foods and beverages. The company has also diversified to produce pet foods, food services and water that are bottled. This means that the Nestle Company has managed to set the pace for the standard of food to be consumed by the Filipinos. Eventually, food regimes have come up to check on the standard of food that is being produced in the Philippines. Currently, Nestle Philippines has been able to employ over 3200 employees and support thousands of people indirectly. Nestle has managed to establish three factories and a fourth one is coming. The company claims to provide the Filipinos with products that will bring a healthy and happier life. In addition, the Multinational Company endeavors to become good and caring to the corporate citizens and in ensuring that the welfare of the Filipinos is taken care of (Divina Roldan, 2010). The Nestle Company has had several accusations on its exploitation of workers in the food industry. In 2002, the rights of more then 600 workers was violated by Nestle in the Cabuyao factory (Cabuyao workers briefing, 2009). The workers desired to enforce their rights and to negotiate with the managers on their retirement benefits. This was because the Multinational had not included retirement benefits on their employment contract at Nestle. However, the Nestle management purported that it was the companys decision to decide whether or not they would give their workers the benefits (Cabuyao workers briefing, 2009). The Supreme Court of Philippines gave justice to the workers and stated that retirement benefits ought to be a subject to be discussed by both parties. Despite all this, the Multinational has not complied with the ruling. As the set pacers in the food industry, the Nestle has made other food industries like the MacDonalds to follow suit. 1.2 Overall Aims and Objectives of the research Globalization has significantly affected food industry in most developing nation states. This is because of the liberalization of the economy and great technological advances. Through various Multinational Corporations like the Nestle, globalization has managed to occur in nation states like the Philippines. This has affected the food industry in many ways both positively and negatively. The colonial structures set by the European powers ensured that the economies of these developing nation states entirely relied on the developed nations (Jensen, 2008). This has made the economies of the third world nation states like the Philippines heavily rely on developed nations for economic prosperity. Against this backdrop, this research desires to look into the effects of globalization in the food industry in the Philippines. By looking into the Nestlà ©, the research seeks to look into these corporations as agents of globalization and how they have affected the food industry in third world countries like the Philippines. To achieve this aim, the research outlined the following objectives: To know the strategies that Multinationals like nestle employ to gain maximum profits. To identify if the Nestle collaborates with the mother nation state (Switzerland) to gain maximum profits in the Philippines. To know the role of colonization in ensuring that third world nation states like the Philippines had weak economies. To know how globalization has affected the tastes of the local people thus affecting the food industry. 1.3 Hypotheses: Hypothesis 1: Globalization has been able to impact the food industry by affecting their tastes of the local people. Hypothesis 2: The Nestle multinational has led to a decline in the local food industries through their effective strategies Hypothesis3: Effective strategies have assisted the Nestlà © Multinational to be able to gain maximum profits in the Philippines. Chapter 2: Literature Review 2.1 Introduction This part of the dissertation seeks to review the literature concerned with the effects of globalization in developing nation states. It is here that the various theories that talk about globalization are discussed. Furthermore, the various literatures on the impacts of globalization and multinationals are reviewed. 2.1.1 Theory To explain this research topic, many theories have been proposed. In any disciplinary research, it is imperative that a theoretical framework that discusses the problems affecting this research is employed. In addition, the theoretical framework will assist in formulating the necessary research questions for designing the research study. It refers to various collections of interrelated concepts such as a theory (Kaplan, 1964). Although various literatures have been able to cover broad diversity of theories, the theory of world systems will be employed to explain globalization and its impact on food industry in the Philippines. The theory emphasizes on the fact that the systems of the world ought to be the basic unit of analysis. The theory refers to the international labor division and this is the basis of globalization. According to the theory, the world is split into the semi periphery, the periphery and the core nation states. The core nation states center on having high skilled l abor and a production that is capital intensive. The rest of the nation states have low skilled labor with a production that is labor intensive. In addition, they specialize on the extraction of minerals. This explains how the process of globalization has emerged in the world (Chase-Dunn, and Grimes. 1995). The nation states with capital and high technology have been able to move into nation states that have labor and no capital. The system changes rapidly because of globalization and individual countries can be able to lose their status as core nation state very fast because of changes. The theory was formulated by Immanuel Wallenstein in 1978 (Wallerstein, 1974). Wallenstein has been able to trace this theory to the 15 century where the feudal economy in Europe went through a major crisis but was changed into a capitalist society. This is what globalization has done to developing nation states. It has been able to transform developing nation states like the Philippines into a capi talist one (Jensen, 2008). This is by opening up the markets and allowing the establishment of foreign investments in the country. The food business has managed to exist even before civilization took place. The advancement of this trade in the 16th and 17th centuries was mostly premised on the discovery of commodities that were geographically specific and tropical plant products (Brenner, 1982). It is agriculture that made the developed nation states become powerful as they sold their agricultural produce to international markets. Wallenstein purports that that the nation states in Europe were able to employ the advantages they had like technology to dominate other nation states economies. They were able to spread the capitalist economy and industrialization resulting in unequal development (Jensen, 2008). Agricultural globalization was seen as a means through which they could construct their economy. In capitalist globalization, jobs and capital move from one nation state to another. This is mainly from the nations that are rich (the core) to the developing nation states (periphery). This made them created thei r own industries that could process food premised on what could be gotten from the local raw materials. Capitalist corporations like the Nestle in Philippines have increased exploitation by paying less money to their staff in developing nation states (Wallerstein, 1974). Globalization is referred to as capitalism but on an international level. In an economy that is globalized, the economic activities of the nation state exist. This is because of an exchange in notions, services, labor forces and technical advances. This has made people do business globally, travel and communicate with each other. The theory can be perceived in the same way as Karl Marx saw class. This means that ownership is compared to non ownership as the means of production. The nation states classified as the core possess and control the main means of production. That is why the core nations are able to dominate the developing nation states. The periphery countries do not own much of the means of production in the world. This is irrespective of the fact that they carry out higher level of the production works. Like in any other class system in many nation states, there exist class positions in the world that lead to uneven wealth distribution. The core nation states get the greatest share of the surplus production (Wallerstein, 1974). Despite owning the raw materials and labor, the periphery nations receive the least of their production. In addition, the core nation states are able to buy raw materials and other goods from the nation states at a cheaper price. The core nation states demand the periphery n ations to buy the products at a higher price. The Nestle was able to gain access in the Philippines because the Multinational comes from the nation state in the core. The Nestle employs the cheap labor from the developing nation states and their raw materials. Wallenstein argues that in the twentieth century, the world systems theory had reached its limits geographically (Wallerstein, 1974). This is because state systems that were capitalist in nature and capitalist markets were extended to all other regions. The United States rose to become a hegemonic power. This means that it had political as well as economic powers. These newly independent nation states were able to confront the control of the core in the entire century (Borines, 2001). Some of the states that had gained independence decided to confront the cores dominance by improving the status of their economy. In the 19th century, liberalism took over as the ideology. It was designed with the hope that there will be equal share markets and individual rights. It also desi red to advance the economic status of the nation states. This is what Wallenstein calls, the transition period. However, the period has been brought about divisions and unequal wealth distribution in the world. Technology is the factor that makes the core nation states to remain in their dominant position. Wallensteins theory has attracted a lot of criticism. The theory has focused a lot on the economy instead of the culture of the nation states. These critics can be categorized in four ways. First of all, the orthodox Marxist who argue that the world systems theory has moved away from the principles of Marxism. This has been depicted in the way the concept of social class has not been given much gravity (Wallestein, 2004). Secondly, the positivists have criticized the theory for being too prone to generalization. The world systems theory is devoid of quantitative data and has failed to put forth propositions that can be contradicted by an observation. Thirdly, the state autonomists have criticized the theory by saying that there lacks a boundary between businesses and the state. All the critics purport that the state should be regarded as the focal point of analysis. Other critics like Brenner have purported that prioritizing the world market means that the local struggles amongst the classes and structures ought to be neglected (Brenner, 1982). 2.1.2 Positive of globalization in the Philippines food industry Globalization refers to the increase in interdependence amongst various business firms in the economies of various nation states in the world. The change agent of this nation state is normally businesses that are owned by various multinational organizations. A Multinational Corporation is an enterprise that involves itself in the management of production in more than one nation state (Tolentino, 2000). Furthermore, Multinationals deliver various services in many other nations. Many scholars have researched on the impacts of globalization in the food industries of many developing nation states. For example, according to Dasguta (2004) globalization has resulted to a rise in products that are consumed in different nation states. Consequently, this results in the rise of many food industries that compete against each other to try and meet the demands of their customers. Eventually, globalization has resulted in increased competition amongst the food industries. This in turn has culminat ed to a greater level of independence to global companies for both global collaboration and economic activities. Harley (2006) argues that most companies have begun to operate globally on an economic scale. According to his studies, the revenue of the company in their nation state was regarded as the highest in their country of origin in the past. However, in this present time, the opposite of the above statement is deemed to be true. Scholars have written on earliest form of globalization. Berberoglu, (2005) purports that since the 1400; globalization took place in the form of capitalism. During this period, the Europeans began forming colonies that could supply them with raw materials and cheap labor for their products. The economies of most developing nation states were developed in such a way that they supplied for the requirements of the integral nation states that existed in the global system that was capitalist in nature (Berberoglu, 2005). The rising trend of markets, finances, services and goods that are interconnected have resulted in the trend of globalization. This has created development in technology as afar as food industry is concerned. In addition, the rise in the stature of multinational companies in developing nation states has influenced the economical, cultural and political aspects of many nation states. In the economic dimension, globalization revolves around the accumulation of capitalism a s the current trend. This is clearly depicted by the widespread labor division that exists in the world, raising numbers of industries within the MNCs and the movement of capital globally from one nation state to another (Suarez-Villa, 2012). Through colonization, these nation states were able to get countries at the periphery like the Philippines to supply all that they need for their economy to expand. This affected the food industry as it made the Philippines become dependent on the developed nation states. The Filipinos grow their own food only to be processed in the developed nation states because of lack of better technology to do the job. In turn, the Filipino farmers get little from their produce while the multinationals get a lot of money. American exploited the Filipinos by forcing them to work for them and buying their produce. This provided cheap labor and market for the American products. The Americans prioritized on accumulating the wealth, industries and the capital o f the Filipinos (Borines, 2001). Harley (2006) argues that for these Multinationals to remain competitive globally, they mostly aim at reducing their costs and prices. This works concurrently with their desire to produce goods of a high standard. Companies look to third world nation states as their centers of operation. They see their firms as a way to benefit from the third world nation states as they would gain a working force that is skilled/unskilled with very low cost. This has been achieved by setting up their operations in nation states like Philippines, Malaysia and India. Borine (2001) argues that colonization left the economy of Philippines in a very weak state. This meant that despite the fact that they were granted sovereignty by the Americans; the Philippines were still not sovereign in their economy. Borines (2001) purports that most of these developing nation states had to rely on the American markets for survival. The economy of the Philippines is highly dependent on agriculture and three quarters of the poor Filipinos depend on agriculture for their livelihood (Borines, 2001). As more and more firms become global, the numbers of competitors increase. In addition, the intensity of the competition increases too. In these nation states, the MNCs have access to untapped markets that will increase their volume of products (Billet, 1991). In addition, these firms have access to a manufacturing low cost base for their exports to the surrounding markets. These multinationals like Nestles have opened up the Philippine food industry to the international market. This has created new opportunities for the Filipino farmers to be able to trade on an international scale. With an increasing population of over 80 million, about 60% of the Philippine populations lives live below the poverty line. The poverty level in the nation state has brought a lot of corruption or exploitation by various Multinationals. In order to reduce the costs, these companies employ exploitation methods to be able to hurt the workforce or damage the environment. Carbaugh (2010) purports that multinational corporations search for places where they can be able to access labor that is inexpensive in order to build their factories. For example, United Fruit is a multinational banana producing corporation in Honduras. The region was chosen because of pursuit of cheap raw materials and labor (Carbaugh, 2010). Normally, these companies are aware of the situations in a nation that will cause them be able to attract maximum gains. These Multinationals are not required to follow any guidelines that may be present in their countries of origin (Rachman, 2008).This means that some of them operate in developing nation states without taking heed to the local regulations concerning businesses. In addition, these companies engage in activities that increase their cost of operation. A weak legal and regulatory system will result in exploitation of labor and resources in the developing nation state. Most developing nation states like Philippines hope that through Multinationals, globalization would transform their poor economy into an active participant in the global economy. As a result, globalization has been able to transform this nation state by increasing the employment opportunities (Rachman, 2008). This is because more foreign companies have come into the Philippines to assist in its ailing economy. This affects the food industry as it avails the necessary labor required. Globalization has resulted to other consequences. First of all, globalization makes nation states that have different value systems are able to try to win each other in the same level (Dasgupta, 2004). This means that different nation states set up structures and policies that will be able to attract more foreign investors in their nation. Globalization has resulted in greater mobility of capital and workers in the international market. Consequently, this has led to a global market place where there has been an increase in the opportunity for employees, customers and managers of the company. For instance, the coming of Nestle Company to the Philippines brought in capital for erecting factories and offices (Local Philippine Context, 2010). Foreign workers were granted an opportunity to work in Philippines. This gives them a greater exposure internationally. However, the entry of Nestle in the Philippines has been able to create an intense level of competition with the local market. The local market is left to compete with the global giant for markets shares and revenues. The most basic requirement of individuals is food. This means that most multinationals that deal with food like the Nestle have very great power. Being the worlds leader in the manufacturing of baby food, the Nestle Company has managed to open up the fo od industry in making baby foods (Borines, 2001). This is despite the various practices like corruption and monopoly that are deemed to be misguided. The Nestle has introduced new techniques of processing like condensation and roller drying. Consequently, this has led to a surplus of cheap milk in the Philippines. The Nestlà © Company commenced exporting its milk to developing nation states in the fiscal year 1873. 2.1.3 Negative aspects of globalization Like in other developing nations, globalization has changed the culture of most Filipinos thus bring obesity to the children and adults. In the fiscal year 2008, the National Statistics Coordination Board revealed that 26.6% of Filipino adults were obese. This has increased by 10% from 1993(ABS-CBN, 2011). 6.6% of children of age 5 to 10 years have b Modern Organizations | Globalization and the Environment Modern Organizations | Globalization and the Environment This essay is based on organizations internal and external environment in todays modern economy. It also discusses the drivers of globalization and effects of globalization on organizations environment. Firstly, it is important to understand the definition of globalization as there are many definitions. Secondly, the drivers of globalization are discussed in this essay including the history, aim and role of World Trade Organization. Further, the relationship between organizations internal and external environment in global market is analyzed. It also highlights the changes that organizations have to face when going global. However, it is very challenging as an organization can control their internal environment but can not control the external environment. An early description of globalization was penned by the American entrepreneur-turned-minister Charles Taze Russell who coined the term ‘Corporate Giants in 1897. However, it was not until the 1960s that the term began to be widely used by economists and other social scientists. It had achieved widespread use in the mainstream press by the later half of the 1980s. Since its inception, the concept of globalization has inspired numerous competing definitions and interpretations. Globalization refers to the shift towards a more integrated and interdependent world economy. Globalization has several different facets including the globalization of markets and globalization of products (Hill, 2004).Globalization has led to increasingly integrated markets across the world, changing the competitive environment in which firms operate. In the face of international competition in domestic and foreign markets, the least productive firms may be forced into bankruptcy while the most productive ones will take advantage of new business opportunities in foreign markets (IMF). Globalization attracts increasing interest and importance in contemporary world affairs. It also inspires passionate supporters and critic (BBC). Globalization is the process of increasing the connectivity and interdependence of the worlds markets and businesses. This process has speeded up dramatically in the last two decades as technological advances make it easier for people to travel, communicate, and do business internationally. In general, as economies become more connected to other economies, they have increased opportunity but also increased competition. Thus, as globalization becomes a more and more common feature of world economics, powerful pro-globalization and anti-globalization lobbies have arisen. The pro-globalization lobby argues that globalization brings about much increased opportunities for almost everyone, and increased competition is a good thing since it makes agents of productio n more efficient (investorwords, 2009). The two most prominent pro-globalization organizations are the World Trade Organization and the World Economic Forum. The World Trade Organization is a pan-governmental entity (which currently has 144 members) that was set up to formulate a set of rules to govern global trade and capital flows through the process of member consensus, and to supervise their member countries to ensure that the rules are being followed. The World Economic Forum, a private foundation, does not have decision-making power but enjoys a great deal of importance since it has been effective as a powerful networking forum for many of the worlds business, government and not-profit leaders. The anti-globalization group argues that certain groups of people who are deprived in terms of resources are not currently capable of functioning within the increased competitive pressure that will be brought about by allowing their economies to be more connected to the rest of the world. Important anti-globalization organizat ions include environmental groups like Friends of the Earth and Greenpeace; international aid organizations like Oxfam; third world government organizations like the G77; business organizations and trade unions whose competitiveness is threatened by globalization like the U.S. textiles and European farm lobby, as well as the Australian and U.S. trade union movements. There are four main elements and drivers of globalization: globalization of markets, globalization of production, technology innovation and falling of barriers to trade and investment which is analyzed in more depth including the role and aim of WTO. Globalization of markets refers to the merging of national markets into one huge global marketplace. Now selling internationally is easier due to falling barriers to cross-border trade. A company doesnt have to be the size of these multinational giants to facilitate and benefit from the globalization of markets. It is important to offer a standard product to the worldwide. But very significant differences still exist between national markets like consumer tastes, preferences, legal regulations, cultural systems. These differences require that marketing strategies in order to match the conditions in a country. Globalization of production refers to the sourcing of goods and services from locations around the world to take advantage of national differences in the cost and quality of factors of production. The idea is to compete more effectively offering a product with good quality and low cost. For example, Nike is considerate one of the leading marketers of athletic shoes and apparel on the world. The company has some overseas factories where has achieved a super production with low cost. Unfortunately Nike has been a target of protest and persistent accusations that its products are made in sweatshops with poor working conditions. The company has signaled a commitment to improving working conditions, but in spite of the fact, the attacks continue. Technological changes have achieved advances in communication, information processing, and transportation technology, including the Internet and the World Wide Web (www). The most important innovation has been development in the microprocessors after that global communications have been revolutionized by developments in satellite, optical fiber, and wireless technologies, and now the Internet and the www. The rapid growth of the internet and the associated www is the latest expression of this development. Besides, innovations have occurred in the field of the transportation technology. The development of commercial jet aircraft has reduced the time needed to get from one location to another. Now New York is closer to Tokyo than ever. Another example of technological change would be websites such as ebay.com where any individual can sell any item to anyone in the world; it is essentially the biggest garage sale ever. A third example of technological change would be production; in the 1900s people were making products largely by hand. Today, machines can whip out a dozen sweaters in an hour and make them higher quality. This way the global market can demand more products at a higher quality. The falling of barriers to international trade enables firms to view the world as their market. The lowering of barrier to trade and investments also allows firms to base production at the optimal location for that activity. Thus, a firm might design a product in one country, produce a component parts in two other countries, assemble the product in another country and then export the finished product around the world. The lowering of trade barriers has facilitated the globalization of production. The evidence also suggests that foreign direct investment is playing an increasing role in the global economy. For example, Panama is now allowed to trade Pharmaceuticals, foods, and school supplies without suffering a tariff. Also, any other import is subject to only a 5% tariff as opposed to the previous 8%. Decreasing and lowering of the trade and investment hurdles internationally is one of the important reasons of globalization. After the establishment of the world trade organization in which many countries participated due to the free trade agreements in the countries around the world. After the establishment of GATT (General Agreement of Tariff and Trade) it is the trade agreement between the countries that are willing to carry the free trade around the world. The aim of these tariffs was to protect the local industries of those countries. But now the scholars of prosperity have though that the world would be become more peaceful and good place to live in when all the countries and their representatives coordinate with each other. The benefit of this is to the countries who do not have much source to utilizes their resources so that they can attract the large foreign investment in their countries. The WTO provides a forum for negotiating agreements aimed at reducing obstacles to international trade and ensuring a level playing field for all, thus contributing to economic growth and development. The WTO also provides a legal and institutional framework for the implementation and monitoring of these agreements, as well as for settling disputes arising from their interpretation and application. The current body of trade agreements comprising the WTO consists of 16 different multilateral agreements (to which all WTO members are parties) and two different plurilateral agreements (to which only some WTO members are parties). Over the past 60 years, the WTO, which was established in 1995, and its predecessor organization the GATT have helped to create a strong and prosperous international trading system, thereby contributing to unprecedented global economic growth. The WTO currently has 153 members, of which 117 are developing countries or separate customs territories. WTO activities are supported by a Secretariat of some 700 staff, led by the WTO Director-General. The Secretariat is located in Geneva, Switzerland, and has an annual budget of approximately CHF 200 million ($180 million, â‚ ¬130 million). The three official languages of the WTO are English, French and Spanish. Decisions in the WTO are generally taken by consensus of the entire membership. The highest institutional body is the Ministerial Conference, which meets roughly every two years. A General Council conducts the organizations business in the intervals between Ministerial Conferences. Both of these bodies comprise all members. Specialized subsidiary bodies (Councils, Committees, Sub-committees), also comprising all members, administer and monitor the implementation by members of the various WTO agreements. More specifically, the WTOs main activities are: Negotiating the reduction or elimination of obstacles to trade (import tariffs, other barriers to trade) and agreeing on rules governing the conduct of international trade (e.g. antidumping, subsidies, product standards, etc.) Administering and monitoring the application of the WTOs agreed rules for trade in goods, trade in services, and trade-related intellectual property rights Monitoring and reviewing the trade policies of our members, as well as ensuring transparency of regional and bilateral trade agreements Settling disputes among our members regarding the interpretation and application of the agreements Building capacity of developing country government officials in international trade matters Assisting the process of accession of some 30 countries who are not yet members of the organization Conducting economic research and collecting and disseminating trade data in support of the WTOs other main activities Explaining to and educating the public about the WTO, its mission and its activities. The WTOs founding and guiding principles remain the pursuit of open borders, the guarantee of most-favoured-nation principle and non-discriminatory treatment by and among members, and a commitment to transparency in the conduct of its activities. The opening of national markets to international trade, with justifiable exceptions or with adequate flexibilities, will encourage and contribute to sustainable development, raise peoples welfare, reduce poverty, and foster peace and stability. At the same time, such market opening must be accompanied by sound domestic and international policies that contribute to economic growth and development according to each members needs and aspirations. (WTO, 2009) An organizations internal environment is composed of the elements within the organization, including current employees, management, and especially corporate culture, which defines employee behavior. Also organizations resources, its capabilities and competencies make up the internal environment of the organization. The internal environment plays a crucial role in the strategic management process of the organization. (Hill, 2004) Although some elements affect the organization as a whole, others affect only the manager. A managers philosophical or leadership style directly impacts employees. Traditional managers give explicit instructions to employees, while progressive managers empower employees to make many of their own decisions. Changes in philosophy and/or leadership style are under the control of the manager. To analyze the internal and external environment of an organization SWOT analysis is carried out to identify strengths, weaknesses, opportunities and threats. The Internal Analysis of strengths and weaknesses focuses on internal factors that give an organization certain advantages and disadvantages in meeting the needs of its target market. Strengths refer to core competencies that give the firm an advantage in meeting the needs of its target markets. Any analysis of company strengths should be market oriented/customer focused because strengths are only meaningful when they assist the firm in meetin g customer needs. Weaknesses refer to any limitations a company faces in developing or implementing a strategy. Weaknesses should also be examined from a customer perspective because customers often perceive weaknesses that a company cannot see. The external environment in which an organization operates presents both threats and opportunities. Growth or decline in international trade, national protectionism and regional trading blocs are some examples of the political and economic environment, which have considerable impact on the marketing of the maritime industry. There are different ways of classifying the types of external environment that usually just reflect the preferences of different authors, but there are some core types which are always identified. Your Kotler et al. (2004) text provides a comprehensive classification of the external environments, which it refers to as the macro-environment, as listed below: demographic environment, economic environment, natural environment, technological environment, political environment, cultural environment, technological environment, administrative/legal environment. Administrative/Legal Environment The administrative and legal environment in a country provides a framework within which an organization operates. In some countries this environment is very restrictive and has significant impact on all aspects of the organization; in other countries the administrative/legal context is more permissive. Understanding the administrative/legal environment is essential to determining if organizational change can take place. The administrative context within which the organization operates may be shaped by a unique combination of forces, including international, governmental, nongovernmental policy, legislative, regulatory, and legal frameworks. An organization is affected by the policy or regulatory context that gave rise to it. This includes specific laws and regulations that support or inhibit the institutions development. Technology Environment Both the types and the level of technology in the society give insight into understanding an institution. Institutions dealing with Western paradigms are dependent on the state of national infrastructure, e.g. power, water, transport; those which concentrate on indigenous research paradigms may have totally different dependencies. Thus, it is important to understand the level of relevant technology in the institutional context and whether such technology is defined by computer literacy or by highly developed indigenous methods of verbal and nonverbal communication. It might also be helpful for an assessment to include a consideration of the process by which new technology comes into use, both to understand how difficult it is to acquire needed research technologies and to develop an appreciation for the societys willingness to embrace both new knowledge and change. Political Environment The economy and legal system of a country are shaped by its political system. As such, it is important that organizations understand the nature of different political systems. Political system means system of government in a nation. Political system can be assessed according to two related dimensions. The first the degree to which they emphasize collectivism as apposed to individualism. The second dimension is the degree to which they are democratic or totalitarian. These dimensions are interrelated; system that emphasize collectivism tend toward totalitarian, while system that place a high value on individualism tend to be democratic. Economic Environment In the economic environment, the organizational analysis should centre on those aspects of the economic system that directly impact the type of project being considered. For example, inflation, labour laws, and opportunity costs for researchers in public institutions directly impact organizational activities in different countries. Countries with foreign currency restrictions represent different environments for institutions than countries without them, for such restrictions have ramifications for research, e.g. for equipment procurement and maintenance. Social and Cultural Environments Social and cultural forces at local, national, and often regional levels have profound influence on the way organizations conduct their work and on what they value in terms of outcomes and effects. For example, the mores of an indigenous culture have a bearing on the work ethic and on the way in which people relate to one another. Undoubtedly, the most profound cultural dimension is language. The extent to which organizational members can participate in the discourse of the major scientific language will determine the extent to which research efforts focus inwardly or contribute to regional and global research agendas. Understanding the national/regional/local values toward learning and research provides insight into the type and nature of research that is valued. For example, what is the relative priority placed on contract research in partnership with local clients, e.g. testing products and procedures with indigenous populations, as opposed to sharing information with academic pee rs internationally, or generating biostatistician data that will shape national or regional policy. Arriving at these priorities involves culture-based decisions. Organizational architecture can be used by multinational enterprises to manage and direct their global operations. To succeed, a firm must match its architecture to its strategy in different ways. Firms whose architecture does not fit their strategic requirements will experience performance problems. It is also necessary for the different components of architecture to be consistent with each other (Hill, 2004). Organizational architecture refers to the totality of a firms organization, including formal organizational structure, control systems and incentives, processes, organizational culture, and people. An organization should be able to analyze their internal environment including their capabilities before they decide to go global. It requires different know-how of the new geographical market and an organization would need to make necessary changes in internal environment to enter the new geographical market successfully. References http://www.cliffsnotes.com/WileyCDA/CliffsReviewTopic www.imf.org www.wto.org www.bbc.co.uk www.Investorwords.com Culture in Mexico | Essay Culture in Mexico | Essay Mexico The country that we had chosen was Mexico. One interesting fact about Mexico is that the country is the 11th most populated country in the world , around 117 million people. The relationship between Mexico and the United States are that they are two countries that share maritime and a land board in North America. Before, Mexico and the United States had a war, that war was called the Mexican War. The war was about Mexico invading the United States, was an armed conflict between the two countries. The official name for Mexico is the United Mexico States. The continental location of Mexico is North America. Mexicos bordering countries are the United States (to the north) and Belize and Guatemala (to the south). The area of Mexico in square miles are 758,400 mi ². The economics of Mexicos energy industry are petroleum industry, oil companies, gas stations, natural gas, coal gas, electrical power industry, electricity generation, electric power distribution, coal, nuclear power, renewable energy industry, alternative energy, sustainable energy, hydroelectric power, wind power, solar power, alternative fuels, and firewood. The manufacturing in Mexico is highly skilled workforces such as engineering, supervisors, and professionals. Because of the highly skilled workforce the competitiveness id at a high level around the world. The primary language the Mexico speaks is Spanish and English. The holidays the are celebrated in Mexico are Cinco de Mayo, honored for the Battle of Puebla, Diez y Seis, honored for the Independence Battle for Mexico, Day of the Dead, for the ancestors of the Mexican culture., etc. The education in mexico is currently controlled by Secretariat of Public Education. The education standards are based on a Ministry at any level in school. The levels in the education have three steps, the steps are primary school (grade 1-6), junior high school (grade 7-9), and high school (grades 10-12). The typical Mexican diet food that is popular is the chicken and fried rice, usually as a main protein as fish and topped with chili. The diet actually depends on what region you are in. The most common cuisine dish is a mix of indigenous and spanish influences. Even though most mexicans prefer/continue to eat more native foods, such as, corn, beans, and peppers. The difference of Mexicos and the United States includes family, religion, education, nationality, personal sensitivity, personal appearance, and status. Mexico also came up with different cultures causing a set of distinctive beliefs. Some interesting facts about Mexico is that Mexicos official name is Estados Unidos Mexicanos, which means United Mexican States. The first press printer used in mexico was in 1539. Millions of monarch butterflies migrate to mexico each year, from United States and Canada destroying their habitat. Mexico City was built over the remains of Aztec, Tenochtitlan. Modern Mexico citizens are a unique mix of different ancient races including Olmec, Zapotec, Toltec, Maya, Aztec, Inca, African, French and Spanish. Mexico is located in the Ring of Fire. Mexico introduced chocolate, corn, and chilis to the world. The largest monument is the Pyramid of Cholula in Mexico. Mexico is second to Brazil in the number of Catholic citizens. Mexico is the most populated Spanish-speaking country in the world and the United States is the second. One sport in Mexico that is in our slides is the Mayan Sport. The Mayan sport is the try to get a rubber ball without making it touch your hands then they have to try to get the rubber ball through one of the rings. The only reason why you cant use your hands is because the rings are high and it would be an advantage. The  winners are rewarded with a large feast. The clothing in Mexico is very unique in many different ways. The types of clothing is quechquemitl, huipiles, puebla dresses, for women and sombreros, sarapes, and guayaberas for men. Quechquemitl can be compared to a poncho, they clothing is used for special occasions. Huipiles represent lots of personality and is usually worn for everyday events. Puebla dresses are used everyday and are becoming more popular in the United States. Sombreros are one the most common Mexican garment. Sarapes are very colorful and serves a functional purpose. Guayaberas is made of lightweight cotton and are pastel colored shirts. Mexico is one of the most populated countries in the world. Filled up with over 117 million people. Mexico and the United States are share a maritime and a land which border. I hope you have learned a bit about Mexico and the countrys culture.