A Study of Globalisation - A study of multinationals and their effect on our local communities

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A study of multinationals and their effect on our local communities

(Above: Guatemalan farmers show a carefree front as their simple

lives are turned upside down by multinational food retail giants.)

Presented to: Dr. Peter Sheldrake

By: Steven Leptos (s3053319)

Table of Contents

Executive Summary

This paper attempts to make sense of globalisation from a social and business perspective. Initially I will talk briefly about globalisation within our community and the different stand points those communities and individuals have taken; for and against globalisation. I will then talk about the multinational companies that have made the phenomenon of globalisation possible and these companies various impacts on societies and local communities around the world. The topic is further analysed by using multinational food retailing companies in Latin America as a case study. Displayed to the reader through this case will be a clear indication of how local communities and in particular their farmers are affected by globalisation and multinational companies.

There are many different views on globalisation; and those against it oppose many different aspects of it. One of the countless reasons why there are anti-globalisation activists is due to the following: Multinational food retailing companies, the backbone of what is known as ‘globalisation’ within the supermarket industry, have in many cases entered small farming communities around the globe and destroyed a way of life for many of the farmers and labourers around them. Within Latin America these farmers have been forced to flee their homes to find refuge within the slums of the urban sprawls within their cities or even to cross borders into the USA.

Introduction to Globalisation


Globalisation can be defined as ' the intensification of worldwide social relations which link distant localities in such a way that local happenings are shaped by events occurring many miles away and vice versa’ (Giddens 1990). It has also been described as ' process which embodies a transformation in the spatial organisation of social relations and transactions - assessed in terms of their extensity, intensity, velocity and impact - generating transcontinental or inter-regional flows and networks of activity'. (Held, et al 1999)

In relation to Latin America (the major area of discussion of this paper) globalisation can be defined as a practice or system that has affected several of the continents most persistent problems. Such problems would be the diverse extent of economic exploitation and social disparity that has branded Latin America ever since it’s European colonisation in the sixteenth century. (Harris & Halebsky 1995)


Free trade fosters prosperity and has an extremely important characteristic that affects our way of life. This characteristic is actually it’s tendency to be able to prevent war. Extensive research has shown that trade promotes peace both directly, by reducing the danger of military divergence, and indirectly, by promoting prosperity and democracy (Weede 2004).

Globalisation and free trade in the 20th century and beyond can be compared with the 19th Century expansion of empires (like the British Empire). These empires built an infrastructure in developing countries; railways, ports and beautifully constructed colonial buildings were just some of the benefits these developing countries could take advantage of. Even though these commodities weren’t built for the benefit of the developing country (they were built for British trade) they still ultimately increased these countries abilities to trade and to become technologically independent.

In the 20th Century infrastructure, technology, health and education systems implemented by the world powers, in developing and developed countries, has improved the overall quality of life for people worldwide, this does not include Africa. The average GDP for all countries except Africa has gone up; however the downside is; the difference between the rich and poor countries has also increased. The reason for this is that the countries introducing themselves to the developing countries are actually gaining a much more significant benefit.


This term is more commonly attributed to the political standpoint of certain people, groups and organisations that are in opposition to certain facets of globalisation. Those in resistance often oppose large multi-national company’s dominance of global trade agreements and trade-governing bodies like WTO (the World Trade Organisation) (Graeber 2002).

Otherwise known as a social movement, anti-globalisation represents its participants in their opposition to large corporations who endeavour to attain and ‘have’ attained political power. Political power can be put into effect via international trade agreements, anti globalisation activists scrutinize these agreements, stating that they quite often undermine ‘the environment, labour rights, national sovereignty, the third world, and other various aspects of our everyday lives as human beings’ (Graeber 2002).

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It is common knowledge that globalisation and free trade can affect developing countries negatively, however, the worlds most developed countries and the people who live within them are also affected negatively. Globalisation forces job opportunities from these developed countries to other countries around the world and low skilled workers in developed countries lose their jobs. This increases the difference between the rich populace and poorer populace in that country. The following quote, from the United Nations, backs this statement up and shows us why there are anti-globalisation activists. ‘The richest fifth of the world have 80% of the world’s ...

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