Level Assessment 3; Answers1

7/24/2019 Level Assessment 3; Answers1

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Level-marked assessmentGlobal fashion and TNCs ; Answers

Name: Class: Date:

1. Transport: !5/100 x 600 = QR 30

"a#tor$ #osts: 1%! -12/100 x 600 = QR 72Of Which:Raw materials 7.5% : 7.5/100 x 600 = QR 45Pr!"cti# csts 2.0% : 2.0/100 x 600 = QR 12Pr$t 2.0% : 2.0/100 x 600 = QR 12Waes 0.5% : QR 3

TNC: &&!

33/100 x 600 = QR 1&'Of which:Research 10% : 10/100 x 600 = QR 60(!)ertisi# a#! *rmti# 11.5% = 11.5/100 x 600 = QR 69Pr$t 11.5% : 11.5/100 x 600 = QR 69

'etail stores: (!50/100 x 600 = QR 300

%. )hat is *lobalisation+

The word globalisation comes from the word globe and means theworldwide coming together of countries and nations. Globalisation is a

process of integration and interaction among the people, organizations

and governments of different nations.It is a process that is driven by

international trade and investment and is aided by information technology.

This process has effects on political systems, the environment, on culture,

on economic development and prosperity in societies around the world.

Advances in technology, such as mobile phones, aeroplanes, telephones

and the internet have made the growth of transport and communication

networs possible. !ountries are able to e"change information and goodsmore #uicly.

The world is becoming increasingly interconnected as a result of massively

increased trade and cultural e"change. Globalisation has increased the

production of goods and services. The biggest companies are no longer

national firms but multinational corporations with subsidiaries in many

countries.


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$ow it was before%

!ountries used to manufacture products in their home countries. &imilar

products used to be in direct competition with each other, but both

companies made the same salaries and production costs. They had the

same customers, used similar suppliers and sold the product at similarprices. This ensured that same conditions applied to both companies.

$owever, due to technical, cultural and economic developments, other

companies around the world which manufacture products at different

conditions can now offer their product in the first country, !ountry A.

Thats why, !ountry ' can sell out a product cheaper in !ountry ' because

it had been produced for less.

(hat has globalisation led to)

Globalisation has resulted in%

increased international trade

a company operating in more than one country

greater dependence on the global economy

freer movement of capital, goods, and services

recognition of companies such as *c+onalds and &tarbucs in -+!s

easons for globalisation%

Improvements in transportation/ larger cargo ships mean that the cost of

transporting goods between countries has decreased. -conomies of scale mean the costper item can reduce when operating on a larger scale. Transport improvements also

mean that goods and people can travel more #uicly.

Freedom of trade/ organisations lie the (orld Trade 0rganisation 1(T02

promotes free trade between countries, which help to remove barriers between

countries.

Improvements of communications/ the internet and mobile technology has

allowed greater communication between people in different countries.

Labour availability and skills/ countries such as India have lower labour costs

1about a third of that of the 342 and also high sill levels. abour intensive industries

such as clothing can tae advantage of cheaper labour costs and reduced legal

restrictions in -+!s.

5ositive Impact of Globalisation%

Increased Competition0ne of the most visible effects is the improved #uality of products due to globalcompetition. !ustomer service and the 6customer is the ing6 approach to

production have led to improved #uality of products and services. As domesticcompanies have to fight out foreign competition, they are compelled to raise

their standards and customer satisfaction levels in order to survive in the

maret. 'esides, when a global brand enters a new country, it comes in riding on

some goodwill, which it has to live up to. This creates competition in the maretand a 6survival of the fittest6 situation.


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Employment(ith globalization, companies have forayed into the developing countries andhence generated employment for them. 'ut it can turn out to be either good or

bad, depending on the point of view you wish to see it from. It has given anopportunity to invest in the emerging marets and tap the talent which is

available there. In developing countries, there is often a lac of capital whichhinders the growth of domestic companies and hence, employment. In such

cases, due to global nature of the businesses, people of developing countries too

can obtain gainful employment opportunities. 'ut the developed countries havelost 7obs on account of this shift of 7obs to the developing world and hence it is a

pinch felt by people in the 8irst (orld.

Investment and Capital FlowsA lot of companies have directly invested in developing countries lie 'razil andIndia by starting production units, but what we also need to see is the amount of

8oreign +irect Investment 18+I2 that flows into the developing countries.

!ompanies which perform well attract a lot of foreign investment and thus pushup the reserve of foreign e"change.

Foreign Trade(hile discussing the effects of globalization, how can we forget about the impact

of foreign trade on an economy. !omparative advantage has always been afactor, even in during old times. (hile trade originated in the times of early

ingdoms, it has been institutionalized due to globalization. 5reviously, people

had to resort to unfair means and destruction of ingdoms and countries to getwhat they wanted. Today, it is done in a more humane way, with mutual

understanding. 5eople who operate in uncivilized ways have to face the (T0 and

other world organizations that have been established with a view to control andregulate trade activities of the countries.

Spread of Technical Know!ow(hile it is generally assumed that all the innovations happen in the (estern

world, the now/how also comes into developing countries due to globalization.(ithout it, the nowledge of new inventions and medicines would remain cooped

up in the countries that came up with them and no one else would benefit. Thespread of now/how can also be e"panded to include economic and political

nowledge, which too has spread far and wide. The most obvious e"ample of thespread of nowledge is that the (estern world today is waing up to the benefits

of Ayurveda and 9oga / traditional Indian practices, while the (estern antibioticsare flooding the Indian marets and improving the #uality of life 1and thelongevity too2 of people in India.

Spread of Culture:ot all good practices were born in one civilization. The world that we live in

today is a result of several cultures coming together. 5eople of one culture, ifreceptive, tend to see the flaws in their culture and pic up values that are more

correct or in tune with the times. &ocieties have become larger as they have

welcomed people of other civilizations and bacgrounds and created a whole newculture of their own. !ooing styles, languages, and customs have spread all due

to globalization. The same can be said about movies, musical styles, and otherart forms. They too have moved from one country to another, leaving an


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impression on a culture which has adopted them.

Spread of Education0ne of the most powerful effects of globalization is the spread of education.Today, you can move in the search of the best educational facilities in the world,

without any hindrance. A person living in 3.&. can go to another continent for a

new e"perience which he may not find in his home country. If one is interested,one can even get a specialization in sub7ects not indigenous to his country andthen spread that nowledge to the home country. A good e"ample of that is how

the American managers went to ;apan to learn the best practices in the field of

mass production and incorporated that nowledge in their own production units.

Legal and Ethical EffectsGone are the days where the limited 7urisdiction became a hindrance in theprosecution of criminals. These days, due to international courts of 7ustice,

criminals can no longer see asylum in a foreign country and are thus brought to7ustice. +ue to globalization, there is also an understanding between security

agencies and police of two or more different countries who come together tocurb global terrorism. $ence, it is now possible to catch the perpetrators ofcrime irrespective of which country they choose to hide in.

:egative Impact of Globalisation

"lobali#ation encourages dependence on other countries for essentialgoods and services$(ith globalization, goods can often be obtained cheaply from elsewhere. Acountry may come to believe that there is no point in producing its own food or

clothing. It becomes easy to depend on imports and specialize in something lie

financial services or high/priced medical care


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globalization has been criticized for, and it is the accusation that it has opened

floodgates for restaurants and eateries which are insensitive to the religious

beliefs of the host nation. 8or e"ample, a lawsuit had to be filed against*c+onalds in India, after it was accused of serving beef in their burgers.

%neven &ealth 'istributionIt is said that the rich are getting richer while the poor are getting poorer. In thereal sense, globalization has not been able to reduce poverty. Instead it has led

to the accumulation of wealth and power in the hands of a few developedeconomies. Therefore the gap between the elite and the underprivileged seems

to be a never ending road, eventually leading to ine#uality. Taing any fashionT:! as an e"ample, we can relate how they give factory worers who produced

the clothing product were given little wages and were not provided with the best

of conditions to wor in counts as one of the ways that the developed countrieshave taen into their own advantage? to mae ma"imum profits.

This picture shows how wealth is distributed. 8rom this, we can identify the

richer and the poorer countries. The richer countries being where the product is

sold and the poorer where the product is manufactured and made.

Loss of (obs in )E'C*s*any people from developed nations are losing 7obs and that is posing a problem

for them since the companies are outsourcing wor to developing countries sincethe cost of labor is low and profits the company considerably.

Loss of Culture!onventionally, people of a particular country follow its culture and time

immemorial.(ith large number of people moving into and out of a country, theculture taes a bacseat. 5eople may adapt to the culture of the resident

country. They tend to follow the foreign culture more, forgetting their own roots.This can give rise to cultural conflicts.

Environment 'egradation


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The industrial revolution has changed the outloo of the economy. Industries are

using natural resources by means of mining, drilling, etc. which puts a burden on

the environment. :atural resources are depleting and are on the verge ofbecoming e"tinct. +eforestation is practiced owing to the non/availability of land,

thereby drastically reducing the forest cover. This in turn creates an imbalance inthe environment leading to climate change and occurrence of natural calamities.

Globalization uses up finite resources more #uicly$ As an e"ample, !hina 7oinedthe world trade organization in +ecember @B. In @@, its coal use began risingrapidly 18igure B, below2.

E+amples of T,C*s -Transnational Corporations./

+c,#al!-s r*rati# is the wrl!-s larest chai#f ham"rer fast f! resta"ra#ts ser)i# ar"#! 6 milli#c"stmers !ail i# 11& c"#tries. ea!4"artere! i# the #ite!tates the cr*rati# was f"#!e! "si#essma# Ra rc i#1&55 after he *"rchase! the rihts t a small ham"rer chai#

*erate! the e*#m"s Richar! a#! +a"rice +c,#al!. +c,#al!-sre)e#"es rew 27 *erce#t )er the three ears e#!i# i# 2007 t 822.' illi#a#! & *erce#t rwth i# *erati# i#cme t 83.& illi#

ca9la is a car#ate! sft !ri# sl! i# stres resta"ra#tsa#! )e#!i# machi#es i# mre tha# 200 c"#tries.;t is *r!"ce! a reistere! tra!emar f


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(**le is a# (merica# m"lti#ati#al cr*rati# that !esi#s a#!marets c#s"mer electr#ics cm*"ter sftware a#! *ers#al cm*"ters.weely wage.

%nsanitary conditionsThe factory itself was #uite unsanitary too. +irty water was stoced, and dumped

outside as soon as it started raining. *eanwhile, to"ic substances were dumpedin regular trashcans. 0ur only protection was face mass. It was also e"tremely

hot in the factory, maing it difficult to wor. According to !hina abor (atchsreport, the factory did not pay worers e"tra when temperatures rose above JJ

degrees !elsius, thus breaing the law. It was awful. And if you got sic, you

lost your days wages.

Inade0uate safety training

(hen I started, I was given a B/minute tal on what to do in case of a fire, butthat was it. I didnt get any other safety training. 0ne worer in 'arbie factory

located in !hina says. 'y law, factory worers must undergo @K hours of safetytraining. This indicates that if any sort of emergency persists, there would be no

sort of nowledge that the worers would be aware on how to react the correctand safe way.

%nlawfully long hours

I wored BB hours a day, from Fam to Hpm with an hour brea for lunch and anhour brea in the evening. 0thers wored B@ or BJ hours. The legal limit is H

hours per day. At this factory, some employees reportedly wored up to B

hours of overtime per month < well above the legal limit of JE hours ofovertime.


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1erbally and physically abused

The worers often got verbally or physically abused if they were slower than others.

)alnourished

I lived in a cramped, dirty dorm with other factory worers. -ditors :ote% It is commonfor !hinese factory worers to live in on/site dorms to save money. This also allows them

to wor longer hours. There was no hot water, no itchen. (e lived four to a room, andhad trouble sleeping because some of us wored days, while others wored nights.

The worers wouldnt eat for days on strie as they would want to save enough money to

send bac home.

Another example of a TNC with broad range of sweatshops in China and Bangladesh is Nike which hasexcessively made the factory owners work until their last ounce of energy.

/. 0oltions

a. )ediaThe media is a very powerful tool for those T:!s 1which are now connoted withslavery and horrible labour2 that they can use. 5eople can use the media to maepeople more aware of the problems that the factory owners go through. Thiswould attract attention of many people to boycott and abandon the product so

that it would receive a great deal of loss. This method has been used almosteverywhere and anywhere around the world. An e"ample is !oca/!ola which was

boycotted and received lots of loss heavily.

This wouldnt directly solve the worers problems but, it would force themreconsider their ways and e"pand on some sort of change.

Inspection 2eports would be made public3 )aking supplier lists public

This is one action that the T:! can start with. It will increase transparency

between the customers and the suppliers. In fact, :ie had used this very methodit used where :ie became the first in its industry to publish a complete list of the

factories that it contracts with. This would mean that a proper negotiation beenmade between the T:! brand and the factory owners.

The proposed deal would have an enforceable arbitration clause, would require the

use of highly qualified fire and safety inspectors and require those inspection

reports to be made public. It would also mandate that the Western brands pay for any

needed repairs. Workers would also have the right to refuse to enter buildings they

believe are unsafe.


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This would help by:

-By making the inspections to be public, this throws off any chance of scams or lies.

-The problems would be dealt by the Western brands, as they take responsibility for

their actions and pay for it.

People who would disagree with this would be:

-Retailers and the Western brand managers as they will be the ones targeted to pay

for any renovation required. It shouldnt be a problem because they are all able to

afford it, with the hard currency they have in the West really increases the amount

they get in the LEDC country.

Large T,C*s to start funding campaigns for labourer*s rights

!ampaigns such as !lean !lothes, Global -"change, !A80+ all have similar and

strong goals in mind. *any of these campaigns are also non/profit organisationswhich mae them all the better to fund. arge T:!s supporting these would help

establish their goals much #uicer and in a more proper, official and negotiatingway. This way, they have a large power to bac them up. The customers of thatT:! would get lots of positive reactions towards it, hence, increasing itspopularity.

This would help by%

/8actory worers conditions and standards raised for them/The T:! supporting the campaigns would get lots of good publicity

%se of mobile phones and social networking to provide greaterinsight into the lives of those producing goods in farflungfactoriesThe high street retailer has signed a deal with Good (orld &olutions, a

non/profit social enterprise, to carry out research via mobiles in a waysuitable for worers who may not be able to read or write. The survey will

cover @@,L worers in J factories in India, &ri ana and 'angladeshand could be e"tended to more factories over time.

8iona &adler, head of ethical sourcing for *M&, said factory owners will be

fully informed, but the surveys will be carried out anonymously, rather

than under the direction of bosses. The system has been testedsuccessfully on @, worers in India and &ri ana over the past year.

NInvolving worers themselves in monitoring conditions in supplierfactories is vital, but worers need to be involved not only in identifyingproblems but in negotiating the solutions. The best way to do this is

through allowing worers to form and 7oin independent trade unions,N said

&am *aher, a campaigner with abour 'ehind the abel.

This would help by%/$aving the factory owners voice heard directly to the campaigners

themselves. Any problems that would persist, would be dealt withimmediately. This includes any in all, abuse, overtime and factory

conditions. The survey would determine which changes need to be made

determining which problems are more serious than others.


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/&ince its being done by a non/profit organisation, this e"pands that there

is no profit being lost by any of the retail stores or even the T:! brand

itself. Thus, this way, even they are happy./The customers will have a satisfaction that if the product wasnt produced

unlawfully, and if it used to, then doesnt anymore.

5eople who would most liely be against this solution are the factoryowners. This would be because they have no upper hand on controlling

the conditions in the factories anymore.


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4uotes and Statistics

I was paid B,E yuan BH euros per month, which is really not enough to live decently with. In !hina, theaverage wage for private sector worers is about J euros. According to !hina abor (atchs report, worers

at this factory and others were regularly paid a month late.

(hen I started, I was given a B/minute tal on what to do in case of a fire, but that was it. I didnt get any

other safety training. 0ne worer in 'arbie factory located in !hina says. 'y law, factory worers must

undergo @K hours of safety training. This indicates that if any sort of emergency persists, there would be no

sort of nowledge that the worers would be aware on how to react the correct and safe way.

I wored BB hours a day, from Fam to Hpm with an hour brea for lunch and an hour brea in the evening.0thers wored B@ or BJ hours. The legal limit is H hours per day. At this factory, some employees reportedly

wored up to B hours of overtime per month < well above the legal limit of JE hours of overtime.

I lived in a cramped, dirty dorm with other factory worers. -ditors :ote% It is common for !hinese factoryworers to live in on/site dorms to save money. This also allows them to wor longer hours. There was no hot

water, no itchen. (e lived four to a room, and had trouble sleeping because some of us wored days, whileothers wored nights.

The survey will cover @@,L worers in J factories in India, &ri ana

and 'angladesh and could be e"tended to more factories over time.

The system has been tested successfully on @, worers in India and&ri ana over the past year.

NInvolving worers themselves in monitoring conditions in supplierfactories is vital, but worers need to be involved not only in identifying

problems but in negotiating the solutions. The best way to do this is

through allowing worers to form and 7oin independent trade unions,N said&am *aher, a campaigner with abour 'ehind the abel.


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i#tre A

i#tre 2

i#tre C

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Level Assessment 3; Answers1