Andrea Jaye C Lupian BSBM 1-A

TTH 9:20-10:50 GE 1211

Economic Globalization: Corporations

The transnational corporation (TNC) is the primary mover behind the economic
globalization, the significance of which lies in the process. Its approach is to use the
factual reality which is distinct to a specific geography. Despite the differentiated
approach, it provides a theoretical basis for understanding the phenomenon that is the
TNC.
Dating from the 15th century, TNCs are chartered companies, or companies
authorized by sovereign states mainly for trade and exchange. It was during the second
half of the 19th century that manufacturing entered the picture. By 1914, manufacturing
companies in US, UK and continental European countries were trans-nationalized.
Though viewed as ‘placeless’, have the power to coordinate and control operations
across the globe, but owes no allegiance to a particular county. It is difficult, however to
measure the size of TNCs against nation-states as the statistics is based on a fallacious
premise. Though tagged as placeless, as of 2002, majority or 96 of TNCs are found in
the developed world.
The driving force behind the expansion of TNCs is investment categorized as
market oriented or asset oriented.As a market oriented investment company, its
profitability depends on continued expansion of its market beyond its home territory; or
when it identifies potential markets requiring its presence for efficiency of operations. A
market-oriented TNC, the size and particular characteristics of market influence the
decision to expand beyond its home territory.
The driving force beyond the asset-oriented TNC is the geographical unevenness of
markets. Another way of saying this is that the assets or resources the company needs to
produce their products and services are unevenly distributed and have to be exploited
locally. Resources such as natural ones like energy, industrial, agricultural and human
resource in the form of cheap labor cost.
TNCs developed through the Greenfield investment where the company builds new
facilities in another country. Host countries usually favor this kind of investment as It
provides job opportunities for it citizens. Establishing TNCs presence in a host country is
done by merging or acquiring a firm.
While the strategic collaboration is where a company from an alliance with a firm in the
host country to attain goals that otherwise cannot be achieved on their own. It maybe
through sharing of cost, product development and access to new technologies. Though
both parts are involved still they remain separate and are competitors.
The embeddedness of TNCs is a complex process that has to take into account the place
and geography of the both the TNCs national home country and that of the host country.
TNCs are products of the cognitive, social, cultural, political, economic characteristics of
their national home countries which they carry to and interact with the host countries. On
the other hand, host countries have their own geographical characteristics deeply
embedded in their own firms. The embeddedness of these characteristics in both – the
TNCs and host countries – interact in a complex way to produce a set of distinctive
outcomes. However, in this dialectical relationship, the TNCs place of origin remains the
dominant influence.
To think of TNCs as independent is misleading. It is, instead, constituted in a
highly complex and dynamic networks of production, distribution, and consumption that
are controlled or coordinated by TNCs.
How the networks are constituted and configured vary in each TNC. The
differences, however, arise from The TNCs specific history derived from their specific
national home country, Cultural and administrative heritage and practices which leads to
a strategic pre-disposition and The nature and complexity of the industry environment
where the firm operates.
Del Monte Philippines, Inc. (DMPI)
Del Monte Philippines, Inc. (DMPI) is a subsidiary of Del Monte Tropical Fruits
Company of Coral Gables, Florida. DMPI exemplifies an approach of operating a
transnational corporation by setting up a subsidiary in a host country, in this case, the
Philippines.
DMPI is important to the Del Monte group because sales from the Philippine
operations constitute 50 percent of the group's annual world sales. The net worth of Del
Monte Corporation is estimated at $1.05 billion in 1988 (Ravanera 1990: 2). DMPI's
plantation site in Bukidnon started operations in 1928 as an alternative site for the
production of tropical fruits due to the bug infestation in their plantation in Hawaii. Other
plantations are located in Thailand, Kenya, and Costa Rica. Bukidnon was chosen as the
site of the plantation for a number of good reasons, namely, fertile soil, rainfall pattern
that is conducive to agricultural production, location outside the typhoon belt and good
ports and shipping facilities.
Canned and fresh pineapples account for 85 percent of the total volume of its fruits
and vegetables production. DMPI also operates a can-making plant, a vinegar plant, a
catsup plant, juice concentrate plant, and fresh tomato processing plant. In 1989, it
entered into the banana industry through a growers and management contract with eleven
big companies. In the same year, it also ventured into catching tuna fish from Sulu and
Mindanao seas in collaboration with the Philippine government and the U.S. Agency for
International Development. Said tuna are either shipped to Manila for domestic
consumption or sent to its sister company in Mayaguez, Puerto Rico. On top of this,
DMPI also manages one of the biggest cattle farms, where cattles feed largely on wastes
derived from the processing of pineapples (Ravanera 1990: 2-3).
The company started with an initial investment of less than $1 million, including
its can-making plant. Its exports started to grow in 1934 and by 1937, its exports
amounted to $1.67 million, half a million more than its original investment. DMPI
experienced rapid growth for the years 1974-1984 when it landed in the SEC's list of top
1000 corporations. In 1987, DMPI was 27th among the top 1000 corporations in the
Philippines. Its sales amounted to P2.23 billion with a net income after tax deduction
amounting to P414.3 million. For the same year, DMPI paid the Bureau ofInternal
Revenue P420 million and an additional P1.5 million for business tax. It paid P537
million in salaries and wages. Its estimated value was placed at over $100 million
(Ravanera 1990: 4).
DMPI's net sales soared from 1974 to 1984 due to the transfer of the major bulk of
Del Monte's operations from Hawaii to the Philippines. This shift in operation was
triggered by the large difference in wages. While Del Monte has to pay the Hawaiian
plantation worker $2.54Ihour, it only has to pay the Filipino worker $15 centslhour.
Cannery workers in Hawaii are paid $2.69Ihour but their Filipino counterparts are paid a
measly $20 centslhour (Ravanera 1990: 4).
 Political Globalization
The changes in governance from a statecentric world towards polycentric networks of
governance and the resultant development of a global political culture which is able, in
part, to hold the balance of the nation-states. The core question of this political
globalization is to what degree the fragmentation of the social world is the cause for the
loss of political autonomy.
The chapter further outlines the three processes which are interconnected by complex and
contradictory relationships: the universalization of nationally contained models of
democracy, the dawning of a global normative culture, and the ‘civil societalization’ of
the structure of governance.
These complex relationships ultimately lead to three perplexing situations:
First situation is the globalization of the nation-state and its model of political
membership and institutionalized governance. This gave rise to the universal desire for
democracy. The nation-state is crucial for political autonomy through the sovereignty of
the people, and democracy is it symbolic badge as a member of the world community of
nation-states. On the other hand, criticisms of democracy become the core around which
various forms of contentious politics unite. Therefore, where democracy exists, its
weaknesses are also discovered.

Second, global normative culture served as a vector for global norms of personhood
postulating as a world of individuals backed by human rights law. Third, polycentric
networks, particularly the global civil society, become opportunities for autonomy and
the rise of new actors and new modes of governance. These, in turn, create new
instabilities and dangers.

The global civil society actors may pose a threat to governance because of autonomy and
in the lack of accountability and democratic credentials. They tend to be self-appointed
spokespersons for espoused causes, creates new political spaces and transnational
networks which terrorists can easily appropriate, as well as the drug traffickers and
organized crime that would undermine a nascent world polity. The result is political
globalization with a new set of tensions with which politics is now structured.

Where before, political conflicts centered on class division, traditional and industrial
economies, or resistance to imperial rule, the new set of concerns are: the right to
difference, individual against community, liberal democracy against cosmopolitanism.
Political globalization succeeded in opening possibilities for the proliferation of areas of
political conflict in: governance, identity, mobilities, and community, the last being the
prominent amongst them.

Bitcoin
Bitcoin, the first cryptocurrency with a deep structure and wide adoption, was created by
Satoshi Nakamoto believed to be a pseudonym for a person or a group. Unlike traditional
currencies issued by central banks, Bitcoin has no central monetary authority, no
government backing, and not based on precious metals. It is, instead, based on a peer-to-
peer computer network which is similar to the BitTorren, a file-sharing system.
Bitcoin’s integrity rests on the mathematical rules and the laws of physics. Bitcoin
currency, like gold and precious metals, are scarce and this scarcity is made possible with
the use of algorithm with a limit. The existence of Bitcoin, in part, comes as a result of
the distrust of anarcho-technologists of government authority. Instead, they believe in the
power of distributed networks and open-source software. The rise of Bitcoin also came
about due to financial crises experienced which resulted to problems in currencies, the
need of global investors for a currency which is firmer than the traditional currency.

Bitcoin’s design provides security guarantee and convenience, much like the traditional
and virtual currency or credit used today. And, Bitcoin requires less processing times and
fees as it is propagated instantly through a global network of computers, running across
physical locations. Bitcoin is independent and more stable than the traditional currencies
like the dollars and the euros, though in reality, its value has fluctuated in its four year of
existence.

Bitcoins core principles lists non-political economy, openness, and independence. Non-
political economy is an apt description for Bitcoin as it advocates the end of the
involvement of the state in the economic sphere. This can be considered as a political
move which attempts to reconfigure politics. But, it is also possible for Bitcoin advocates
to go for a variety of political positions.
In terms of political globalization, Bitcoin provides sovereignty over the management of
its own finances and away from a conglomerate of fiat money-issuing agencies, like the
governments, state banks, and private banks. Responsibility of management is returned to
the individual user who created value through his work. This principle is in contradiction
to what globalization-promoting corporations and governments intend. The concept of
denying the established financial system and disempowering it and placing a new
currency system may be novel and ambitious. In reality, it is already in full swing.