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GPHY 101 Lecture Notes - Commercial Speech, Global Sourcing, Containerization

Course Code
GPHY 101
Anne M C Godlewska

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According to Merk, outsourcing involves manual and administrative labour.
Workers in the local core are worried about outsourcing
NIDL (New international division of labour) is a key aspect of globalization.
Nike: consumer power
- Our current global system is based on an earlier colonial economic system
- Global periphery produced raw materials and global core produced finished goods
o Colonial systems driven by economical powers
o Imposed with economic and military strength
- Particular regions specialized in particular economic activities
o Different colonies became associated with particular exports
o Increased trade and increased integration
Core periphery division: Canada is an exception (periphery linked with USA and Britain)
- Produces raw materials
- Ongoing relocation of manufacturing operations from the global core to the global periphery
- Service sectors too such as call centres
- Knowledge-intensive and skill-intensive functions retained by the core
Who’s Behind the NIDL
- TNCs are driving it (transnational companies)
- Corporations that locate/part of division in more than one countries
- Initially operated in developed world now expanding to NIC (newly industrialized companies)
- Operated by subdividing or subcontracting
How does NIDL work?
- Locational advantages offered by global periphery
- Fierce competition so facilitating travel, taking advantage of economic and political conditions
- Advantages: amount of competition, market sizes, cost of labour/resources, poor regulation
- Tradeoff w/ security and quality
3 Important Pre-conditions before patterns of relocation
1. Spread of agricultural methods to the global periphery (green revolution)
2. Increased sub-division and simplification of production tasks
3. New transportation technologies (especially ‘containerization’)
According to Merk, global sourcing have important effects:
- creating a social distance in employment relations
- Returning to simple extract of effort
- Undermining unionization
- Production low-tech & labour-intensive
- Canvas shoes dominated until a 1970s health boom led to new products
- Increased competition has led companies to relocate production to S.E. Asia
- Nike: Japan to N. US to Korea, Thailand, China and Taiwan to Indonesia, China and
- Subcontracts 100% of its shoe production to Asian companies
- Subcontracting provides labour flexibility
- Nike has both long-term and short term relationships with industrial partners in Asia
- Developed partners (statement shoes), developing partners, volume producers
Consumer/Investor Power or Harness Consumer Power
Nike’s first response (1996) to the public relations disaster was defensive
they’re not our factories; see they’re not that bad…
Court challenge over commercial speech vs free speech when Nike sued
2004… - Corporate Code of Ethics with Monitoring
Not effective in stopping unethical labour
2007… – NIDL is built on global inequity
Cons of NIDL
1) It is geographically more complex than it seems
cores & peripheries at multiple scales
2) It is economically more complex than it seems
more incentives than just cheap labour
3) It is ethically problematic
Labour injustice/Excessive Profit Taking
According to Merk, resistance to strategies of global outsourcing comes from labour and consumers