GLOBALIZATION - and sovereignty

see witiger.com/internationalbusiness/globalizationSustainableDevelopment.htm
see witiger.com/internationalbusiness/globalization.htm

including material from Global Business Today, 2nd Ed. Hill, McKaig ... and Richardson ISBN-10: 0-07-098411-5

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Globalization and National Soverignty
 
 

Chpt 1

Globalization and Sovereignty page 29 "...today's increasingly interdependent global economy shifts economic power away from national governments and towards suprnational organizations such as the World Trade Organization (WTO), the European Union, and the United Nations... unelected bureaucrats now impose policies on democratically elected governments ... thereby undermining the soverignty of those states..."

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Trans-national companies growing more powerful than some countries
- The top economies compared to the top companies
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KEY POINTS

The idea for this chart comes from an article in Fortune magazine in July 2000. The article in Fortune in turn was derived from statistics gathered by World Bank, World Development Report 2000. WTGR

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2010 Update

MGTC46 student Angelica C. in Jan 2010 updated the Top 100 Economies chart with figures from the Fortune 500 companies list for 2009  http://money.cnn.com/magazines/fortune/global500/2009/full_list/ and the 2008 GDP figures from the CIA Factbook  www.cia.gov/library/publications/the-world-factbook.....

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2020
Rank Country/Corporation "GDP/sales
($mil)"
1 United States $20,936,600.00 or $20 trillion
2 China $14,722,731.00 or $14 trillion
3 Japan  $5,064,873.00
4 Germany $3,806,060.00
5 United Kingdom $2,707,744.00
6 India $2,622,984.00
7 France $2,603,004.00
8 Italy $1,886,445.00
9 Canada $1,643,408.00  or $1.6 trillion
10 Korea, Rep $1,630,525.00
11 Russian Federation $1,483,498.00
12 Brazil $1,444,733.00
13 Australia $1,330,901.00
14 Spain $1,281,199.00
15 Mexico $1,076,163.00
16 Indonesia $1,058,424.00
17 Netherlands $912,242.00
18 Switzerland $747,969.00
19 Turkey $720,101.00
20 Saudi Arabia $700,118.00
21 Poland $594,165.00
22 Sweden $537,610.00
23 Walmart $523,964.00  or $500 billion
24 Belgium $515,332.00
25 Thailand $501,795.00
26 Nigeria $432,294.00
27 Austria $428,965.00
28 United Arab Emirates $421,142.00
29 Ireland $418,622.00
30 Sinopec Group $407,009.00
31 Israel $401,954.00
32 State Grid $383,906.00
33 Argentina $383,067.00
34 China National Pertoleum $379,130.00
35 Egypt, Arab Rep $363,069.00
36 Norway $362,009.00
37 Philippines $361,489.00
38 Denmark $355,184.00
39 Royal Dutch Shell $352,106.00
40 Hong Kong SAR, China $346,586.00
41 Singapore $339,998.00
42 Malaysia $336,664.00
43 Saudi Aramco  $329,106.00
44 Bangladesh $324,239.00
45 South Africa $301,924.00
46 Volkswagen  $282,760.00  or $280 billion
47 BP $282,616.00
48 Amazon $280,522.00 or $280 billion
49 Toyota Motor $275,522.00
50 Colombia $271,347.00
51 Finland $271,234.00
52 Vietnam $271,158.00
53 Exxon Mobil $264,938.00
54 Pakistan $263,687.00
55 Apple $260,174.00 or $260 billion
56 CVS Health $256,776.00
57 Berkshire Hathaway $254,616.00
58 Chile $252,940.00
59 Romania $248,716.00
60 Czech Republic $243,530.00
61 United Health Group $242,155.00
62 Portugal $231,256.00
63 McKesson $231,051.00
64 Glencore $215,111.00
65 New Zealand $212,482.00
66 China State Construction Engineering $205,839.00
67 Peru $202,014.00
68 Samsung Electronics $197,705.00
69 Mercedes-benz Group $193,346.00
70 EXOR Group $192,754.00
71 Iran, Islamic Rep $191,718.00
72 Greece $189,410.00
73 Ping An Insurance $184,280.00
74 AT&T $181,193.00
75 Amerisoucer Bergen $179,589.00
76 Industrial & Commercial Bank of China $177,069.00
77 Total Energies $176,869.00
78 Hon Hai Precision Industry $172,869.00
79 Trafigura Group $171,474.00
80 Kazakhstan $169,835.00
81 Iraq $167,224.00
82 Alphabet $161,857.00
83 China Construction Bank $158,900.00
84 Ford Motor $155,900.00
85 Ukraine $155,582.00
86 Hungary $155,013.00
87 Cigna $153,566.00
88 Costco Wholesale $152,703.00
89 AXA $148,984.00
90 Agricultural Bank of China $147,313.00
91 Chevron $146,516.00
92 Qatar $146,374.00
93 Cardinal Health $145,534.00
94 Algeria $145,164.00
95 JPMorgan Chase $142,422.00
96 Honda Motor $137,332.00
97 General Motors $137,237.00
98 Walgreens Boots Alliancee $136,866.00
99 Kuwait $136,197.00
100 Morocco $112,871.00

2020 figures provided by MRK460 student
Alexandria Cortez P.
 
 

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Top Economies(2008) VS Annual Sales of leading companies
Country/ coporations	GDP/Sales($BIL)
United States	13,820
China	6,473
Japan	4,262
India	2,816
Germany	2,816
United Kingdom	2,154
France	2,074
Russia	1,985
Italy	1,814
Brazil	1,794
Mexico	1,494
Spain	1,337
Canada	1,263
South Korea	1,243
Turkey	854
Indonesia	811
Australia	752
Iran	733
Taiwan	673
Netherlands	636
Poland	597
Wal-Mart Stores	379
ExxonMobil	359
Royal Dutch Shell	356
BP	281
Chevron	204
Toyota Motors	204
ING Group	197
General Motors	181
General Electric	173
Ford Motors	172
ConocoPhillips	172
Citigroup	159
AXA group	152
Volkswagen Group	149
HSBC Holding	147
Daimler	145
Dexia	141
Allianz	139
Sinopec-China Petroleum	134

 
 
 

Top 100 Economies (1999) versus Annual Sales of leading companies (Corporations in bold)
	Country/Corporation	GDP/sales ($mil)		Country/Corporation	GDP/sales ($mil)
1	United States	8,708,870.0	51	Colombia	88,596.0
2	Japan	4,395,083.0	52	AXA	87,645.7
3	Germany	2,081,202.0	53	IBM	87,548.0
4	France	1,410,262.0	54	Singapore	84,945.0
5	United Kingdom	1,373,612.0	55	Ireland	84,861.0
6	Italy	1,149,958.0	56	BP Amoco	83,556.0
7	China	1,149,814.0	57	Citigroup	82,005.0
8	Brazil	760,345.0	58	Volkswagen	80,072.7
9	Canada	612,049.0	59	Nippon Life Insurance	78,515.1
10	Spain	562,245.0	60	Philippines	75,350.0
11	Mexico	474,951.0	61	Siemens	75,337.0
12	India	459,765.0	62	Malaysia	74,634.0
13	Korea, Rep.	406,940.0	63	Allianz	74,178.2
14	Australia	389,691.0	64	Hitachi	71,858.5
15	Netherlands	384,766.0	65	Chile	71,092.0
16	Russian Federation	375,345.0	66	Matsushita Electric Ind.	65,555.6
17	Argentina	281,942.0	67	Nissho Iwai	65,393.2
18	Switzerland	260,299.0	68	ING Group	62,492.4
19	Belgium	245,706.0	69	AT&T	62,391.0
20	Sweden	226,388.0	70	Philip Morris	61,751.0
21	Austria	208,949.0	71	Sony	60,052.7
22	Turkey	188,374.0	72	Pakistan	59,880.0
23	General Motors	176,558.0	73	Deutsche Bank	58,585.1
24	Denmark	174,363.0	74	Boeing	57,993.0
25	Wal-Mart	166,809.0	75	Peru	57,318.0
26	Exxon Mobil	163,881.0	76	Czech Republic	56.379.0
27	Ford Motor	162,558.0	77	Dai-Ichi Mutual Life Ins.	55,104.7
28	Daimler Chrysler	159,985.7	78	Honda Motor	54,773.5
29	Poland	154,146.0	79	Assicurezioni Generali	53,723.2
30	Norway	145,449.0	80	Nissan Motor	53,679.9
31	Indonesia	140,964.0	81	New Zealand	53,622.0
32	South Africa	131,127.0	82	E.On	52,227.7
33	Saudi Arabia	128,892.0	83	Toshiba	51,634.9
34	Finland	126,130.0	84	Bank of America	51,392.0
35	Greece	123,934.0	85	Fiat	51,331.7
36	Thailand	123,887.0	86	Nestlé	49,694.1
37	Mitsui	118,555.2	87	SBC Communications	49,489.0
38	Mitsubishi	117,765.6	88	Credit Suisse	49,362.0
39	Toyota Motor	115,670.9	89	Hungary	48,355.0
40	General Electric	111,630.0	90	Hewlett-Packard	48,253.0
41	Itochu	109,068.9	91	Fujitsu	47,195.9
42	Portugal	107,716.0	92	Algeria	47,015.0
43	Royal Dutch/Shell	105,366.0	93	Metro	46,663.6
44	Venezuala	103,918.0	94	Sumitomo Life Insur.	46,445.1
45	Iran, Islamic Rep.	101,073.0	95	Bangladesh	45,779.0
46	Israel	99,068.0	96	Tokyo Electric Power	45,727.7
47	Sumitomo	95,701.6	97	Kroger	45,351.6
48	Nippon Tel & Tel	93,591.7	98	Total Fina Elf	44,990.3
49	Egypt, Arab Republic	92,413.0	99	NEC	44,828.0
50	Marubeni	91,907.4	100	State Farm Insurance	44,637.2

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Globalization, international companies growing more powerful than some countries
- How the actions of a large company can effect the sovereignty of a country

To demonstrate the power that a large company can have over a medium sized country, we searched the newspapers for a story reflecting how a transnational corporation may deal with a contentious issue that negatively effects the sovereignty of a country.
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This Oct 2003 story tells how Ford is planning to cut jobs at a plant in a European country. The President of that country has met with Ford officials but the cuts are going to take place anyway. Belgium is upset that they previously gave concessions to Ford in order that Ford would do business in the country and employee lots of people, but this has not been reciprocated as much as Belgium would have liked. WTGR

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Globalization, some specific examples of the consequences

U.S. company in Mexico
 

In Mexico, a U.S. waste disposal company, Metalclad, was awarded $16.7 million in damages after the state of San Luis Potosi blocked its waste site in the village of Guadalcazar. Local residents complained the Mexican government was not enforcing environmental standards and that the project threatened their water supply. Metalclad's victory established that NAFTA's dispute mechanism reaches to subnational governments, including municipalities." "... in a small town in the  Mexican state of San Luis Potosi, a California firm -- Metalclad -- a commercial purveyor of hazardous wastes, bought an abandoned dump site nearby. It proposed to expand on the dumpsite and to haul toxic waste material and other hazardous stuff and dump it in San Luis Potosi. The people in the neighbourhood of the dump site protested. The municipality, using powers delegated to it by the state, rezoned the site and forbid Metalclad to extend its land holdings.Concerned about the potential hazards of the reopened dump to  the local water supply, the state conducted an environmental impact study. As a result, it rezoned the property and forbid any extension of Metalclad's land holdings. Metalclad, under Chapter 11 of the NAFTA, then sued the Mexican  government for damage to its profit margins and balance sheet as  a result of being treated unequally by the people of San Luis Potosi. A trade panel, convened in Washington, agreed with the company."  http://www.canadiandimension.mb.ca/extra/x0421dc.htm

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Japanese company in Canada, moving to Mexico

In the 1980's, a Japanese subsidiary of the Mitsubishi Electronics group bought the RCA TV plant in Midland, Ontario. Mitsubishi operated the plant successfully for some time until they suffered price competition from other picture tube makers who had operations in areas with lower employment costs. In the mid-1990's, in consideration of the NAFTA opportunities, Mitsubishi closed down the plant in Ontario, and moved operations to Mexico.

Russia cuts off natural gas to Bulgaria
 

UTSC MGTC46 student  Venelina G., in January 2009, emailed to say I have some thoughts on globalization. Yesterday we mentioned quite a few things about globalization and some were cons, but we never discussed how reliable we have become on globalization. I have a particular example in mind. pic provided by Veneline from her facebook page

Veneline says "I am from Bulgarian background and my grandparents still live in Bulgaria. Recently (Dec 31, 2008) Russia stopped all export of natural gas to the European countries over a price dispute and the issue has not been resolved to this day. This does not really affect us here in Canada, but I have spoken to my grandparents recently. In accordance with a Russian model, Bulgaria uses an interesting heating model for buildings. Water is heated in specific buildings around each city using natural gas. Then the boiling hot water is passed into pipes under ground, and using pressure the hot water is lead to neighborhoods, buildings, and houses around the cities. Of course, with the recent absence of natural gas the whole country is left freezing during the winter, as there has been no natural gas to heat the water and there has been no heating in buildings for just about a week. I can't help but wonder how in the 21st century, with so much trade around the world, it is possible for this to happen. As important and positive globalization and international trade have been, countries have become way too reliable on each other and have lost self sufficiency on all levels. I think this is just about another negative side of globalization, as with the uncertain political nature in the recent years countries should at least make certain that if anything was to happen with them they should have a way to cope with it, even if it was a short term solution."

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Russia cuts off natural gas to Bulgaria - PART II !
 

UTSC MGTC46 student  Wendy L, in January 2009, emailed to say "In the news today [2009 Jan 19] , I found an article, "Russia, Ukraine sign gas deal" which relates to the news that our classmate, Venelina, has pointed out earlier for globalization."

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Wendy says "Russia and Ukraine has signed a deal today to restore natural gas shipments to Ukraine after 2-weeks of freezing Europe! http://www.thestar.com/business/article/573410 I just wanted to point out that although this dispute has been resolved.  However, in the article, it has also stated that this is "further complicated by geopolitical struggles over Ukraine's future and over lucrative export route for energy riches...". Indeed, because of globalization, nations may have relied on each other too much but because of globalization as well, technology  has allowed information to be so widely spread that we all know what’s happening on the other side of the world and that, it can greatly impact one’s reputation. Also, in a similar article from Yahoo News – it stated that European Union is now questioning the credibility of Russia and Ukraine as gas suppliers to Europe. I think it is time for European governments to come up with a contingency plan and be a bit more independent so that a similar case will not occur in the future again." WTGR says "yes Wendy, the 'technological environement' (web based info) has resulted in a situation where the customer can be very much aware of what is happening, at the same time, people in the Ukranian diaspora can be made aware of the problems 'back home'.

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U.S. company closes Cdn subsidiary - job losses result

"Moores plant closing costs 600 jobs" Moores, a Canadian company operating more than 100 retail stores, was bought out by American firm "Men's Wearhouse Inc." in 1998. Moores had done well as a Canadian company and became the largest retailer of men's suits and sport coats in Canada. When they were bought out by the Americans in 1998, Moores had 115 stores and the American buyer had 414 stores. In March 2008, reporter Dana Flavelle with the Toronto Star wrote a story about how the U.S. parent of Moores was cutting back and announced closing Moore's clothing plant in Quebec. Citing "Canada's rising dollar", the U.S. company said "the plant was no longer competitive with lower-cost rivals". students of international business in Canada might know that Montreal used to be the centre of the "made in Canada" clothing business and this recent situation of the Moores factory shutting is yet another example of how globalization has effected an industry sector that previously was a significant employer.  In 2005 (The Toronto Star reported) the Moores plant employed 1,000 people, by early 2008 the U.S. parent had cut that back to 600, and in March 2008 the remaining 600 lost their jobs too. The U.S. parent, "Men's Wearhouse" (in 2008) imports made in Korea for $99 as well as manufacturing in Mexico and Eastern Europe. (Jules Abend)

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