Transnational Corporations’ Global Clout

ImageA leitmotif of human history has been the need for people to venture to faraway lands to seek a better life. Such travel has been provoked by the search for territory and resources, the need to spread religion, curiosity about foreign cultures, and the desire for knowledge.

Cross-border movement of people began as early as 105,000 years ago when the first humans migrated from Africa to the Middle East (History, 2007), but it only got the name “Globalization” in the 1960s. The term has many definitions. The sociologist George Ritzer defines it as a process “involving increasing liquidity and growing multi-directional flows of people objects, places and information, as well as the structures they encounter and create that are barriers to, or expedite, those flows” (as cited in Macionis & Plummer, 2012).

In a seminal act of globalization, Christopher Columbus set sail across the Atlantic to find a westward sea route to the Orient and stumbled upon the New World in the fifteenth century – an event that marked the discovery of America. Today, America itself has become a key driver of globalization. Its economic, political and cultural clout has propelled the popularity of American culture and goods.

US-based transnational corporations (TNCs) are at the forefront of American globalization. TNCs are extremely wealthy companies with the power to control and run operations related to the manufacture of goods, in multiple countries (Macionis & Plummer, 2012). Renowned US TNCs include, Apple Inc and McDonald’s. These are major icons that rake in billions in revenue each year. They have become established brands with millions of followers willing to identify with them beyond the utility of the products that bear their brand names. Thus, affirming French cultural theorist Jean Baudrillard’s notion that “commodities are bought and displayed as much for their sign-value as their use-value” and that the phenomenon of sign-value has become an essential part of commodities and their consumption in the consumer society (Kellner, 2009).

Core Nations versus Peripheral Nations

The globalizing power of US TNCs is based on the fact that they are situated in the most powerful country in the world. The US has ample natural resources, and according to American sociologist Immanuel Maurice Wallerstein, it occupies the privileged position at the top of the world’s pecking order.

The US is one of what Wallerstein termed the “core” countries. These are rich, first world, Western nations, such as the UK, France and Germany. They have had a long history of accumulating wealth by exploiting the people and resources of “peripheral” nations like Africa, Latin America and Asia, for profit (Wallerstein, 2000).

A classic example is the US government’s support of the dictatorship of Mobutu Sese Seko in the 1960s, which gave US TNCs access to the Congo’s minerals for over 30 years (American Companies Exploit the Congo, 2010). Wallerstein argues that trade and labor relations in the world today continue to be defined by the exploitative Eurocentric paradigm of the past.

Reports last year about the poor treatment of Foxconn workers in China, who assembled Apple’s iPhones and iPads, prove Wallerstein’s point. Foxconn employees worked 76 hours per week, and often, for 11 days in one stretch. Stress from work caused some workers to commit suicide (Gardner, 2012).

The fact that the Chinese employees get only a small fraction of the amount each iPhone or iPad is sold for, suggests that Apple’s success in popularizing its products is not just due to its creativity, but to its low overhead costs resulting from the international division of labor that gives it access to cheap labor from developing countries.

That Foxconn factories went as far as to install nets around their buildings to prevent workers from jumping to their deaths (Mick, 2012) attests to how indifferent state governments hungry for foreign investment and TNCs hungry for profits can be to the welfare of workers, until, of course, a major news agency publicizes the atrocity.

With cheap labor from developing countries, it is no wonder that Apple can mass manufacture hundreds of devices a day, flood world markets with them, and amass large amounts of money to spend on major publicity campaigns aimed at creating new markets for its products.

Want Creation

Heavy investment on publicity campaigns to increase consumerism is a key reason for the pervasiveness of American culture and products. Publicity consists of advertising, which creates “wants” for goods that people don’t really need. As art critic John Berger (1972) puts it, “Capitalism survives by forcing the majority, whom it exploits, to define their own interests as narrowly as possible. This was once achieved by extensive deprivation. Today, in the developed countries, it is being achieved by imposing a false standard of what is and what is not desirable.”

Publicity these days, may take the form of “Disneyisation”. This is a sales strategy that involves putting a sales object into a story-line, merchandising, and performative salesmanship, whereby sales staff “dress up” and sell a product. The whole idea is to convince a potential customer of the meaningfulness of what is actually, a hollow sales attempt to boost company profits (Bryman, 2004 as cited in Macionis & Plummer, 2012).

Globalization in Singapore

Globalization has profoundly impacted Singapore society in many ways. The Organization for Economic Co-operation and Development’s (OECD)’s definition of globalization adds another dimension that will be useful for the discussion that ensues. Globalization, OECD says, “gives rise to…increasing interdependency and uniformity of national markets,” (Globalization, 2003) thus hinting that globalization tends to make the world a more homogenous place, or a “Global Village” as Canadian communication theorist McLuhan (1962) puts it, where everybody shares a universal culture.

Globalization has made Singapore society homogeneous in some ways, but its pressures have been mitigated by a process known as “Glocalization”, whereby local cultures counter global influences (Macionis & Plummer, 2012). The term coined by British sociologist Roland Robertson points to the co-existence of both “universalizing and particularizing tendencies” in a community (Glocalization, 2012).  A case in point is the influence that McDonald’s has had on Singaporeans and Singaporean food businesses.

To a large extent, McDonald’s has homogenized breakfast eating habits throughout the world. The fast-food giant serves meals to around 68 million people a day in 119 countries (McDonald’s Company Profile, 2012), which means that as you munch on your Big Mac, millions of citizens from nations as far as Chile or Czechoslovakia are probably enjoying a McDonald’s burger with you. The homogeneity is also evident within Singapore. Pop by a McDonald’s outlet on a weekend and you’ll find that having breakfast and enjoying free coffee refills at the fast-food outlet has become a favorite Singaporean ritual. This homogeneity, however, has been mitigated by glocalization as seen from the creation of the Teriyaki Chicken Burger and the Samurai Burger, both of which indicate McDonald’s efforts to fit their products to Singaporeans’ taste for Asian flavors.

Another example of glocalization is the “McDonalization” of Singapore-based Indian food joint, Komala’s. Instead of serving meals, the traditional way, on banana leaves, Komala’s decided to mimic McDonald’s fast-food model based on the organizational principles of efficiency, quantification, calculation and predictability (Macionis & Plummer, 2012).

By serving food at affordable prices in a modern setting, and even implementing a delivery service like McDonald’s, Komala’s made Indian food more accessible to Singaporeans and profited from it as seen from the progressive increase in the number of Komala’s fast food outlets since it started the concept in 1995.

Glocalization has also produced negative effects in Singapore society. Consider the impact of McDonalization in the arena of the local Arts scene. Organizational principles similar to those used by the fast food giant, which are in essence, “an entrenched form of a disciplinary, economics-oriented instrumental rationality,” have been used to nurture the Arts in Singapore (Wee, 2010). Wee argues that the arts will not thrive if commercial utility motivated by the hard-nosed focus on quantitative performance indicators remains the main driver of arts development here.

The Singapore Government’s policy responses to the effects of globalization are also glocalized. The Government is selective of the kind of globalization it wants.

While it welcomes commercially beneficial arrangements, such as TNC-presence in Singapore and the pursuit of multilateral trade liberalization through the signing of Free Trade Agreements with the US, it remains closed to criticisms from developed nations about Singapore’s Internal Security Act, history of defamation suits against foreign press and opposition politicians, and the absence of authentic labor unions (Peebles & Wilson, 2002).

The government’s argument for this selective globalization – choosing economic liberalization over political liberalization – has been that it needs to preserve stability so that investors will feel secure in Singapore. (Peebles & Wilson, 2002). This cherry-picking approach has been Singapore’s response to globalization. Hence, it continues to preserve its Asian-style democracy in the face of pressure to turn into a western-styled one.

TNCs are major drivers of globalization. The world today is essentially ruled by the cult of wealth and power. In such an environment, players with money make the world go round. TNCs bring with them the promise of foreign investment and jobs, both of which are in demand all over the world. TNCs are aware of the upper hand they possess in the overall balance of power and use that power to coerce governments into acceding to their demands for resources in exchange for expertise and investment.

Globalization, although countered by glocalization, continues to march steadily toward homogenizing society, as is evident from the commodification of culture represented by powerful brands owned by business monopolies that have a tendency to marginalize smaller, less established, indigenous brands.

Only time will tell if big businesses will cloak the world in boring sameness, or if they will be squarely fought off by governments that are insistent on preserving diversity within the cultural fabric of our time.

References

American Companies Exploit the Congo (2010). Retrieved August 31, 2012, from             http://www.projectcensored.org/top-stories/articles/19-american-companies-exploit-the-congo/

Berger, J., (1972). Ways of Seeing. Penguin Books.

Christopher Columbus (2012). Retrieved August 31, 2012, from             http://www.bbc.co.uk/history/historic_figures/columbus_christopher.shtml

McDonald’s (2012). Retrieved August 31, 2012, from             http://www.aboutmcdonalds.com/mcd/investors/company_profile.html

Mick, J. (2010, 29 June). Foxconn Installs Anti-Suicide Nets at Its Facilities. DailyTech. Retrieved from http://www.dailytech.com/Foxconn+Installs+AntiSuicide+Nets+at+Its+Facilities/article18877.htm

Gardner, D., (2012, 29 March). The shame of Apple: iPhone factories where they work 76 hours a week and up to 11 days straight. MailOnline.

Globalisation (2003) Retrieved. August 31, 2012, from             http://stats.oecd.org/glossary/detail.asp?ID=1121

Glocalisation (2012). Retrieved August 31, 2012, from             http://searchcio.techtarget.com/definition/glocalization

History (2007). In J. W. Wright (Ed.), The New York Times Guide To Essential Knowledge (p. 481). St. Martin’s Press.

Kellner, D., (2009). Jean Baudrillard. The Stanford Encyclopedia of Philosophy.             Retrieved August 31, 2012, from             http://plato.stanford.edu/archives/win2009/entries/baudrillard/

Macionis, J., J. & Plummer, K., (2012) Sociology (5th ed.). Pearson Education             Limited.

McLuhan, M.(1962). The Gutenberg Galaxy. London: Routledge & Kegan Paul

Peebles, G., & Wilson, P. (2002). Economic Growth and Development in Singapore:             Past and Future. Edward Elgar Publishing Limited.

Wallerstein, I., (2000). The Essential Wallerstein. New Press.

Wee, C. J. W-L. (2010). Culture, the Arts and the Global City. In T. Chong (Ed.)             Management of Success: Singapore Revisited (pp. 489-503). Institute of             Southeast Asian Studies, Singapore.

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