GGR288H5 Study Guide - Final Guide: Horizontal Integration, Ford Model T, Diorite
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What is a Fordist Economy?
Direct investment –putting all there money to one product (risky- putting all your eggs in one
basket, which may lead to bank r.)
It an assembly line, standardize production and came about because of tec, and increase
efficiency in output
What is a Post-Fordist Economy?
Indirect investment because you have partnerships that allow to divide up labor and
production which is much cheaper and efficient, less risker. Ex. ( china tire malfunction
fails- dose not affect the entire car production)
Out sourcing of production and labor
Franchising- you get sales without owning the location (using of labeling and products) –
To the best of my knowledge: Fordist is the era of mass production, Henry Ford Model T all that stuff. Direct
investment and industrialization of cities, factories are placed in cities and the economy is generated there.
Standardized production so Hoyt models and the circular model. Basically things are produced faster for less.
Post-fordist is modern economies based around globalization, indirect investment to foreign countries, TNC
(trans national companies) outsourcing to foreign countries and the deindustrilization of cities - more teritary
employment than primary/secondary production and the models for the 21st century cities. So less national
investment more international investment. This ties into the economic geography through the transition into
the modern economies from those of the early 20th century to that of the late 20th century/ early 21st, the
transition of city landscapes to deal with this and the national investment. I hope this helps (apologies about
the spelling), the textbook has a good section on this stuff; any questions feel free to ask.
Post Fordist Geography
Difference between fordist /post fordist economies
Especially in production
Increasingly in corporate structure
Concentration of capital
Orientation of trade
o Developed, incorporation of developing countries : most nike products are
consumed in developed worlds and produced in developing world
Organization of economies
o Developing world – manufacturing & technology –large pop, large labour supply
o Developed world – Management & service- focusing on commincation skills and
Why the difference in Strategies?
Horizontal integration – same sector, increased market share & bargaining power,
integrating into same economy ex. Loblaws buys out metro to increase market share and
controls much larger sector of economy, lager the market share greater power to bargen
* exapands outwards side to side same type of things
Vertical integration–different sector, control over supplies marketing
o Economies of Scale
*moves up wards so there are different things being incorporated with in the
What are the Geographical aspects of both?
out sourcing and how each country how different labor costs
ex. Canada 10 an hour where as china 1 dollar an hour
when you out source your products there are not strict environmental factors
Understand the complexity of the Service Economy?
*tertiary and up – Canadan is service economy
Geo Of the service Economy
Variations in skill levels and income
o Implications for developed economies Divisions
o Tertiary (retail, personal services)- its dose not tell us where people are working
o Quaternary (research, information, management)
o Quinary (Executive)
Flexibility in location – technology
Hard Skills (comp sci) out sourced to developing economy, Soft Skills- majority of ppl
will be employed here, dealing with people
Institutional ‘thickness’- building off one another
o Personal contacts- network are important
Is there a geography to the service economy?
Hard skills – manufacturing countries such as china and other countries
Soft skills- social skills trying sell the product with in the country- every country has soft
What are the key components of globalization?
2 basic components:
Freedom of trade-new thing, being able to trade with different countries (NAFTA)
comes together as a group and start trading amongst.
Freedom of investment – out sourcing of jobs indirect and direct investment
What is the motive for globalization?
Reduce trade barriers
o Countries should open their markets – dismantle trade/investment barriers
“race to the bottom” – in order for cooperation to be profitable they need cheaper labor and they
have to keep searching for cheaper labor and if you cannot keep the cost of labor down investment
will go elsewhere. ( whose going to do the job for the cheapest?)
“cut and run”- this is about exploitation of labor
“living wages”- 30 to 40 thousand dollars a year in Canada but in third world countries will be
Consider the types of jobs, the employees and the conditions?
Women do the assembly line and men are seen to be higher job
o >80% of workforce
Men – managers, supervisors, security
Women - assembly line work
o Young (13-25)
o Little formal education
Gender division of male and female
Cheap, Flexible, Replaceable
o Greater dexterity, tolerant of tedious work, docile
o 10 hours per day, 7 day week
o Obligatory overtime
o No protection ( no unionization) & No benefits ( health and vacation)
Why tolerate these conditions?
Consider the pricing of products?
o $14.60 materials
o $3.37 labour
o $3.41 overhead
o $1.12 (factory profit)
Sell to retailer $45.00