Nestlé and Globalization

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by Saya, Haruka and Lisa

Introduction to Nestlé Company, with a focus on the globalization story

The Nestlé company was founded in Vevey, Switzerland, by a pharmacist named Henry Nestlé in 1866. In 1867, Henri Nestlé created a new product called “farine lactée” meaning “flour with milk”, an alternative to breastfeeding developed in order to fight infant mortality due to malnutrition. By 1868, Nestlé was already operating in France and in Germany, and by 1874, Nestlé had become a global brand, selling its products in Austria, Belgium, Italy, Russia, Spain, Serbia, Sweden, the Netherlands, the United Kingdom, and so on. In 1905, Nestle. and Anglo-Swiss Milk Company merged to form what is now known as Nestle Group.
In response to an increase in import duties in Australia (Nestlé’s second largest export market), the company decided to begin manufacturing there in 1906 through acquiring a major condensed milk company, the Cressbrook Dairy Company, in Brisbane.
By 1913, the Company was operating factories in Singapore, Hong Kong, Calcutta, Bombay, Colombo and so on.
However, most production facilities remained in Europe and the onset of World War I brought severe disruptions, despite the demand created for dairy products through the government contracts in Europe. The end of World War I brought with it a crisis for Nestlé because of the suspension of the partnerships with governments. In 1947, Nestlé merged with a swiss firm, Alimentana S.A., the manufacturer of Maggi seasonings, bouillon, and dehydrated soups, and the holding company changed its name to Nestlé Alimentana Company.
New products appeared steadily: malted milk, a powdered beverage called Milo in 1934, Nescafé in 1938, and Nestea in 1944. Nestlé entered the non-food business for the first time in 1974 by becoming a major shareholder in the French leading cosmetic company L’Oréal. The company diversified further in 1977 with the acquisition of Alcon Laboratories, a pharmaceutical company from Texas.
The company adopted its present name Nestlé S.A. in 1979 and, with the acquisition of several major brands including Friskies, Herta, and Perrier,the firm became the largest food company in the world.

Environment

The globalization of Nestle has brought both negative and positive impacts on the environment.

On one hand, Nestle is working at creating products which are less harmful to the earth. For example, Nestle Waters uses eco-friendly plastic water bottles that are “made with at least thirty less plastic than the average half-liter bottle”. Also, the company has succeeded in reducing the packaging weight due to the collaboration between the Nestle waters R&D center and the packaging agencies. Since 2008, greenhouse gas emissions and non-renewable energy impacts for the packaging process have been reduced by 19 percent in Nestle Waters. In addition, the company uses renewable energy to reduce greenhouse gas emissions. As a matter of fact, Nestle Mexico obtains 85 percent of its electricity from wind power.

On the other hand, Nestlé’s globalization has greater negative effects on the environment such as pollution and the abuse of resources. For instance, according to Greenpeace, Nestle failed to obey the regulations in China and discharged huge waste in rivers and lakes there. Also, the company illegally pumped millions of gallons of water from California’s San Bernardino National Forest for ten years, which is against the federal law.

Economy

Nestle has positively and negatively influenced the economy of many countries. The positive side is that the company provided job and training opportunities for people. For example, Nestle has been built in Vietnam in order to meet the demands for its Nescafe coffee products, and has created more than 200 new jobs in the area. Located in the Dong Nai province, the company manufactures the products and provides them for the local people and also exports them overseas. The American Chamber of Commerce in Vietnam reports that Nestlé trained more than 19,600 coffee farmers in Vietnam in 2012 and aims to engage with 20,000 Vietnamese coffee farmer households within five years.
While Nestle brought employment to the people living in various countries, it has also encouraged child labour in developing countries. A report by the Fair Labor Association informed that 1.8 million children in West Africa are at risk of abuse through dangerous child labour. Although Nestle signed an agreement in 2001 to end the use of child labour on cocoa farms, Nestle violated the contract.

Society & Culture

The impact that globalization has on society and culture are somewhat interconnected. Nestlé has been known for many things such as the infant formula scandals, instant noodles with high levels of lead, changing coffee culture and more. However, there are always two sides to every story.
Nestlé has long been accused of harming the health of infants, specifically those in third-world countries. This baby milk scandal has resulted in boycotts against the company since the late 70’s. Although Nestlé claims that breastfeeding is the best, they would hire sales girls dressed as nurses to appeal to mothers and give them samples to get them “hooked on” infant formula. Many poor and undernourished third-world women are physically unable to breast-feed or too preoccupied with the basics of survival to find the time to do so and Nestlé uses this to their advantage. These uneducated mothers would dilute the powder milk to make it last longer and often with contaminated water which harmed their babies. However, recently, Nestlé has begun developing educational materials for both health care professionals and parents on the benefits of breastfeeding and run campaigns and seminars. Also because they are aware of the health risks polluted water poses to infants, Nestlé does not donate powder milk formula but instead, funds and ready-to-go foods and drinks.

Nestlé’s effect on culture may be the spread of coffee it is spurring. It has been promoting coffee in China where the current per-capita consumption per year is just four cups of coffee per person per year in comparison to Japan’s 400 or Hong Kong’s 150. They have opened a Nescafé Coffee Centre in Yunnan province to provide training to not only farmers but also to agronomists and coffee business professionals. Heiko Schipper, Managing Director of Nestlé’s Food and Beverage Division in the Greater China region said, “this new centre is a continuation of our long-term investment in the future of coffee production and consumption in China.” The Swiss company has also sent experts to Vietnam to help coffee farmers improve the quality of their coffee beans. The number of coffee drinkers in developing countries is on the rise in recent years and Asian countries such as Vietnam are becoming key suppliers of beans. Although this has changed the agriculture in these areas with many of the coffee lands in Yunnan being converted from tea farms, it seems to be more of a positive effect for those affected. However, currently, most of Yunnan coffee “is too expensive for consumption within China, but also not at a high enough quality to be considered ‘specialty coffee’” (China Briefing). This remains a problem amongst farmers and are working to improve their coffee both for the global and domestic markets.

Politics

The globalization of Nestlé Company brought both positive and negative effects on politics. One positive example is that Nestlé has recently entered into a partnership with Vietnam to help train the country’s farmers to improve the sustainability and quality of their coffee crops. One negative example is that the company made a deal with the wife of the infamous dictator from Zimbabwe Robert Mugabe named Grace Mugabe, buying 1 million liters of milk a year from a farm seized from its rightful owners by her. Grace has taken over at least six of Zimbabwe’s most valuable white-owned farms since 2002, building a farming empire from illegally confiscated farms, which led to an international boycott, as well as EU and US sanctions. Nestlé went forward with the deal even as the country’s agriculture-based economy was collapsing and inflation was reaching unheard of levels.

Conclusion

Nestlé is a big company and has a lot of influence over many countries, especially in the consumer industry. They should use that power to spread a positive influence and be a role model so that other growing companies can follow their lead so that they can compete and be sustainable in the global market.

McDonalds

Environment – Haruna

McDonald’s has many negative effects on the environment. Not only is the pollution from the factories a problem, but the abundant unusable waste they produce is another major problem McDonald’s has to face. They produce 90,000 ton of waste and costs 1.3 million dollars annually for McDonald’s to process all the waste. Additionally the packaging that they use for their products not only leads to waste production but also leads to numerous amounts of natural resources being used. Furthermore, McDonald’s is “Eating up the Amazon Rainforest”. In other words, McDonald’s has contributed to the deforestation that has occurred in the Amazon. They depended on the Amazon for soy production to feed their chickens. It ruined the soil fertility in the Amazon which made it harder for reforestation, and due to the high demands, the producers were forced to expand their farmlands. The resulting desertification  also harms the ecological food chain, as forests are a home to many animals. As methane is one of the greenhouse gases, the fact that MacDonald’s is the world’s largest meat producer also contributes to global warming because of the methane cows emit.

Although McDonalds is a major contributor to many environmental problems, they are making an effort to mitigate it. McDonalds main rule is “REDUCE, REUSE, RECYLE, DISPOSE”. They are taking many actions behind the scenes, which are not publicised. For instance, the company used to ship drinks that were already in individual packaging however now they freeze the drinks which decreases the mass therefore it reducing packaging. This method allowed them to reduce 4 million pounds of garbage per year. They also used to pack French Fries into different bags but now they place them all in the same bag, allowing them to reduce the use of plastics. They have also pledged to end deforestation. With the help of Greenpeace, they have promised not to use high carbon stock forests, which are forest that includes high biodiversity. Although they are trying their best to make up for their actions, it is still necessary for them to keep working on these problems.

Culture – Mizuho                                                                           

McDonald’s have contributed in the integration of different cultures around the world as they developed new menus to fit the demands of people in different areas.

For example, before the first McDonald’s opened in India, the Indian owner had to think carefully about what foods to offer because there are a mix of Hindus and Muslims in India. Muslims do not eat pork, Hindus do not eat beef and quite a few Indians do not eat meat at all. So the McDonald’s meat orientated menu had to go through a major change. This has led to the western culture and the Indian culture to mix in the form of food for example the “McCurry Pan” gives a twist to the traditional Indian cuisine. Even though the “Big Mac” is the signature menu of McDonald’s, it has beef, which is considered sacred in the Hindu religion. So the “Chicken Maharajah Mac” and vegetarian options such as the “McVeggie” were invented. From there, many different varieties of burgers were born, familiarizing the locals with western foods and culture but still taking in account the cultural needs and respecting the traditions of the locals.

In Japan they were first opened in 1971 and like India have made changes in the menu for example, providing seasonal drinks and foods such as the “Cherry fizz” and the “Matcha McFlurry”.

But there are negative effects of McDonald’s on the culture. Before the first McDonald’s opened in Rome, there were protests because the yellow “M” sign would ruin the aesthetic of the historical town. Locals also opposed because food is not only culturally but historically and socially important to them and they wanted to preserve the traditional Italian dining. This led to the “Slow Food Movement” which emphasizes the importance of local food cultures and people’s interest in them.

This shows that globalization calls for respect and compromise between the different cultures and traditions, which result in unique mix of culture and new movements

Economy – Ayumi

McDonald’s mainly has positive impacts on economy but there are some negative effects as well.　Firstly, McDonald’s has greatly helped for boosting economy by providing corporation tax.　When McDonald’s operates shops within its country, it eventually provides corporation tax for the nation’s government as an additional capital in the country.  This additional capital improves the country by for example, building more infrastructures which speed up deliveries across the nation and increase the levels of GDP/Gross Domestic Product as supplies are sent to producers more efficiently.

McDonald’s also runs charities such as the Ronald McDonald’s foundation which help lower economies, for example they invested $2.3 million for children’s sporting aid.  Likewise, McDonald’s contributes millions of dollars in taxes alone. With this massive amount of capital, the government is able to arrange better lifestyles for people.

The main positive effect created by McDonald’s is a massive amount of jobs and employments provided every year in all around the world.  They now have 761,000 employees around the world. It leads many people to have more disposable income than they would without a job.  Mcdonald’s also employs teenagers for part time work, which opened up a larger variety of –

However, there is a negative side to working. In order to make a high profit the McDonald’s Corporation pays the employees very low wages and does not pay them for working overtime. Additionally, especially in LEDCs/Less Economically Developed Country, McDonald’s exploits local workers and forces them to work very long hours at below minimum wage.  This is because many more people just get any work they can to survive, whereas, corporations like McDonald’s help some people with a way out of poverty as it gives them a source of income where they wouldn’t get it otherwise.

Another negative effect is that because McDonald’s is a massive company which dominates the market, local businesses are forced out as their land can get bought out by McDonald’s.  This leads to unemployment for the employees in those local businesses.

Society – Haruka

McDonalds has been supporting many local communities and societies for quite a while.  McDonalds has given a great impact on society with supporting organizations and charities such as the “Ronald McDonald House” (RMHC) and “McDonalds Camp Quality”.

Since 1974, the Ronald McDonald House, the “home-away-from-home” has supported families with children in hospitals by giving them a warm and comfortable place to rest, not far from hospitals.

Families like this, often have to face traveling long distances and either have to pay for hotels or sleep bedside their child in hospital rooms.

The charity provides support, stability, and access to resources for children and families around the world. Every year, the Ronald McDonald House helps nearly 6 million children and families all over the world.

Currently, there are 322 Ronald McDonald Houses located in 57 different countries and regions.

However, on the other hand McDonalds has also had a negative impact on society as well. The biggest reason behind this, is that the majority of the foods that McDonald’s sells, is far from “a healthy lifestyle” and do not contain any nutrition. McDonald’s is said to have most likely contributed to the growing obesity rate. Fast food restaurants’ meals have extremely high calories and some of the meals can serve more than 1000 calories. Then add the fries and drinks and you can easily have 2000 calories in one meal. The average calories a fully grown adult should take is about 2000 to 3000 calories a day.

It is hard to tell when McDonald’s started to affect the obesity rate, but according to the CDC in the 1950’s 33% of Americans were overweight and 9.7% were obese.  Then in 1990, 40 years later, the obesity rate rose to 30% and 56% of people were overweight. During this period, McDonald’s grew rapidly throughout the United States, so it is correct to predict that McDonald’s has had an impact on the obesity rate.

UNIQLO and Globalization

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UNIQLO store in New York City

“Made for all”. Cheap and affordable, simple and functional, yet colorful and elegant. As
one of the most famous fashion retailers in the world, UNIQLO has more than 800 stores around the globe including the U.S., UK, France, Singapore, China, and more. UNIQLO was founded in 1984 in Hiroshima as a small company, but gained popularity during 1990s when Japanese economy was in recession and everyone wanted cheap clothes. When first expanding overseas, it opened too many stores too quickly and had to close many of them. They learned from their mistake and carefully established their unique brand identity.

 

Social    

Since their open in 1984, UNIQLO has expanded into a global clothing store brand with over 1,700 stores spread throughout 18 different countries. When they first started to open stores overseas, they were unsuccessful. They opened too many stores too quickly and didn’t have enough popularity to keep many of the stores open. From their mistakes, they have made the comeback and now successfully have close to 1,000 stores across four continents. UNIQLO is famous for their sturdy yet cheap clothes. The question every should be asking is: How is UNIQLO able to afford selling quality clothes, pay their employees and still make a profit?
          Unlike other clothing brands who use up to 300 manufacturing companies, UNIQLO only has 70. Chief executive of Uniqlo U.K. explained that having fewer contracts with manufacturers allow executives to easily inspect for  “good quality control”. Once UNIQLO finds a factory that meets their standards, they dedicate themselves to buying all of the factory’s product for a contract time span of five years. By doing this, the small number of factories are able to focus only on UNIQLO’s merchandise. While this creates a large benefit for the company itself, the concern shifts over to the people who are making these globally sold products.

          Most of UNIQLO’s factories are located in cheap manufacturing bases such as China, Vietnam, and Bangladesh. The minimum wage for factory workers in Bangladesh are as low as 21 cents per hour. In 2013, there was a terrible accident that occurred in the horrible working conditions of the Bangladeshi people (click here for the whole story). The Bangladeshi people demanded that the companies “pledge upgrades to safety standards and inspections” (Huffington Post). Well known brands such as Gap and H&M immediately took action and created an agreement to improve working conditions for these people. Yet, Fast Retailing, the company that owns UNIQLO has not done anything. Neither are they members of the Fair Labor Association or the Sustainable Apparel Coalition.

Economic

By globalizing and extending its manufacturers and shops, UNIQLO has gained more profit than ever, being valued at $14 billion. Globalization coerced UNIQLO to realize “economies of scale”, which is “the cost advantage that arises with increased output of a product”. When one increases the production, the cost naturally decreases accordingly.

UNIQLO contributes to regional economic development by increasing employment and transferring technology. Although UNIQLO is a Japanese company, it hires local staff in shops overseas since they are more aware of the subtle demands and trends of local customers than Japanese managers. As a result, it not only employs large number of local people but also educates them on special skills such as management, marketing, and customer service which the local staff can use for the further development of their own businesses.

UNIQLO also pushes economic advancement of developing countries by means of FDI, Foreign Direct Investment, which encourages sustainable business and economic independence. UNIQLO started a social business called Grameen UNIQLO, which plans to complete all product-related processes in Bangladesh, including product design, material procurement, production at local factories, store sales, purchasing and wearing, and ultimately reinvest profits in social business initiatives in Bangladesh. This structure enables local people to obtain high-standard technology which UNIQLO uses to produce high-quality clothes, restructure the whole industry, and use the distribution network that UNIQLO left for future businesses. Therefore, FDI by UNIQLO makes Bangladesh globally competitive.

However, there are negative impacts. Since UNIQLO has so many suppliers, UNIQLO and its suppliers are interdependent on each other. If troubles occurred to the suppliers, UNIQLO would not be able to produce enough clothes, which would be detrimental. Or, if UNIQLO goes bankrupt, the suppliers will as well follow the same pattern. UNIQLO has a reputation for its cheap price. However, behind the cheap price is the cheap labor of suppliers in developing countries.

Environmental

• RECYCLING

UNIQLO’s slogan being “MADE FOR ALL” explains how they contribute towards environmental issues. UNIQLO has introduced the “Reuse and Recycle” programme to effectively engage consumers to recycle their old clothing. 90% of the clothes collected are sent to refugee camps to help the people in need for reuse; the remaining 10% are recycled into fiber to create new clothing or turned into fuel.

• REDUCING ENVIRONMENTAL IMPACT

UNIQLO has also takes various different strategies in order to minimise environmental impact. For instance, UNIQLO uses energy efficient LED lighting for displaying the clothing and banners. They are currently working on switching the shop’s indoor lights to LED lights as well.  They have also focused on reducing waste from the packaging of the clothes and cardboard boxes for when transporting the goods. Statistics say that UNIQLO has managed to reduce the amount of cardboard boxes used for transportation by 15% from 2006. Furthermore, 58% of the UNIQLO  shops in Japan work with a recycling company that collects “store waste materials” and shipping materials such as plastic bags and cardboard boxes.

• HEATTECH

HEATTECH is a type of clothing made by UNIQLO and roughly 10 million of the Japanese citizens use them during the cold winter seasons. This innovative material created in 2003 has benefitted both the individual consumers and the environment. HEATTECH is a famous piece of material which functions by “lowering the consumer’s thermostats by 1 degrees celsius”. If all 10 million consumers in Japan were to wear the HEATTECH during winter, it would be able to save 580,000,000 kW of electricity and reduce 1.04 million tons of CO2 emissions.

 

Week 6 – Globalization Presentations

This week we had our group presentations on globalization in regions of our choice. We had two groups present on Monday and three on Wednesday.

The first group up was Rina, Enya and Haruka H., who looked at globalization from a familiar point of view: Japan. They talked about how the Japanese are easily influenced, how trends such as UGGs have created cheaper, fake ones and Starbucks is causing local coffee shops and cafes to close down.
The next group to present was Erika, Kairi and Maho’s group who focused on the Arctic. They told us how globalization has attracted foreign investment, enhanced transportation, provided better education and promoted ecotourism.

Mizuho, Haruna, Haruka Y. and Ayumi presented first with their presentation on the Maori on Wednesday. The colonization of the Europeans since Captain Cook’s discovery of New Zealand has affected the Maori in many ways. Many of their native animal species have become extinct and the population of the Maori themselves has decreased.
My group, consisting of Saya, Haruka N. and I did our presentation on globalization in Karnataka, India. Karnataka has become widely known as India’s IT Hub and this has both its ups and downs. Although there have been more employment opportunities, it has also led to some cases of child labor and pollution.
Finally, Joshu, Soichiro and Yamato explained to us the affects of globalization in Hong Kong. First globalized during the colonization by the British, although Hong Kong is a part of China, it is really a city of its own. Yet with advantages come disadvantages and overpopulation, wealth and health disparity and pollution may just be that.

It was really interesting to see how different regions of the world have been affected differently by globalization. I had no idea that globalization was affecting the Arctic as well. With the group blog post and midterms coming up, I’m pretty stressed out but I hope they’ll both go well.

 

3220 Lisa Matsumoto

Toyota and Globalization

TOYOTA AND GLOBALISATION

by Yamato, Soichiro and Joshu

ENVIRONMENT 

Toyota is known for its successful productions with respect with hybrid cars. It invented the first gasoline-electric hybrid car called the ‘Prius’ in 1997, and exported the car to the United States in 2000. The company didn’t set high expectations for the popularity of the car there because gas was at its cheapest and the most popular cars were gas inefficient. To their surprise, however, the car became so popular that there was a six month waiting period for it. It wasn’t as if other hybrid cars were selling at this rate; in comparison to the Prius selling at 159,000 in 2007, the Honda Civic Hybrid sold at about 20 percent in the same year even though the price and efficiency were nearly the same. In addition, another hybrid car from Toyota, the Toyota Yaris, wasn’t nearly as successful despite costing about half as much. This was due to the Prius’s stylish appearance which could be recognized as a Prius at first glance, which ultimately became the most famous symbol for an environmentally-friendly car. By driving this car, the person inside could be seen as a prestigious front runner for protecting the environment. It also introduced a futuristic interior system with the dashboard in the center of the car and a LED meter displaying how the hybrid system was working. The japanese company introduced the idea of driving in the quiet and eco-friendly vehicle to the United States when the most popular cars were loud and inefficient SUV’s by manufacturing the stylish yet efficient car. From then on, the idea of driving ‘green’ cars has spread to other countries around the world. The company took the initiative step to introducing the idea of a hybrid car to reduce the emission of CO2 gasses in the atmosphere around the globe. In 2015, Toyota announced that it had sold eight million hybrids in counting, and estimate that about 58 million tons of CO2 emissions were cut down because of their hybrid cars. In other words, the company brought positive effects for earth’s future, when protecting the environment is one of the prior action we must take.

TOYOTA IN INDIA
The Toyota Kirloskar Motor automotive industry is a subsidiary of Toyota in India. It was established in 1997, and is currently the 4th largest car maker in India. Entering the Indian market from a foreign origin, the Toyota Kirloskar Motor industry gives the local customers an opportunity to purchase cars from a “global” perspective. This enables them to advance from the orthodox “sub 4-meter segment” and globalize within the automotive industry. Having great success, the TKM currently holds two manufacturing plants on the outskirts of Bangalore, Karnataka, which can hold up to 320,000 vehicles combined. The second plant which was constructed in late 2010 is said to be at 55% of its maximum utilization, indicating that employment rates will increase within the next few years. Moreover, the establishment of TKM’s second plant is gaining attention from dealers in foreign countries; because manufacture rates are increasing annually, TKM is considering to ship automobiles abroad. Having a reputation, Toyota appeals to the public of India.
As motorization rapidly spreads across the country, air pollution is becoming a major problem. Unlike the Toyota manufacturing plants in other countries, TKM does not manufacture the prius, therefore, cars that efficiently handle car emissions are not properly introduced to the Indian markets. In the future, Toyota should consider India’s environment and enable eco-friendly cars available to purchase. The Toyota Kirloskar Motor company promotes motorization in India, provides job opportunities, and globalizes India through automotive manufacturing.

THE FRONTIER OF AUTOMOBILE SOCIETY
Kampung Buayan, a village in the jungle of Borneo, Malaysia, has been experiencing rapid development in recent years at the frontier of globalisation. When I first visited the village in 2012, it was not accessible by car. Villagers endured a subsistence lifestyle, by farming, hunting and gathering. Although the village was not entirely secluded from urban society, its inaccessibility limited its connections with surroundings towns and the state capital city. However, things started to change in 2013, when a road was developed. The new road enabled villagers to drive four-wheel-drive trucks to the city. When I visited the village in 2015, the villagers were consuming huge amounts of products from town. In addition, I found out that two automobile accidents, causing the death of three, had happened after the new road was developed. Globalisation was in drastic effect on the jungle community right before my eyes. The data for Vehicle ownership per 1000 population manifest this phenomenon. In 1960, 25 out of 1000 people in Malaysia owned cars. In 2002, 240 people owned cars, resulting in an average annual growth rate of 6.7%. At the same time, from 1960 to 2002, however, the growth of per capita income in Malaysia was 3.8%*. Ownership of vehicles increased more rapidly than the growth of per capita income. Malaysia as a whole was experiencing rapid development, and in 2013 the wave of globalisation reached the jungle village Kampung Buayan. The desire to engage in the outside world has prompted villagers in the jungle to buying automobiles. However, mountain roads are unpaved, traffic laws are neglected or not in use, people drink drive dangerously without helmets or seatbelts on, and dozens of people crouch on the back of a pick-up truck. This caused three deaths in two short years. Automobiles, the symbol of modern lifestyle, is causing tragedies at the frontier of rapid globalisation.

*Table 1. Historical Data on Income, Vehicle Ownership and Population, 1960-2002, Joyce Dargay, Dermot Gately and Martin Sommer “Vehicle Ownership and Income Growth, Worldwide: 1960-2030”, NYU Department of Economics working paper, January 2007. (http://www.econ.nyu.edu/dept/courses/gately/DGS_Vehicle%20Ownership_2007.pdf)

IKEA & Globalization by Rina, Enya, Haruka

IKEA & GLOBALIZATION

IKEA has been one of the world’s largest furniture retailers since the early 1990s. Originating in Sweden, it has spread to 37 countries with a workforce of 76,000. IKEA aims to create an international market that is culturally close to Scandinavian’s market, encouraging the trend of Scandinavian designs around the world. As it is true of most of the large scale organizations, IKEA has influenced the world both positively and negatively. In this blog post, we would like to shed light on the various ways that IKEA has affected the world.

 

Blue– countries where IKEA stores are built
Yellow– countries where IKEA is still planning to open a store

ECONOMY & SOCIETY

The first ever IKEA shop opened in 1943 in Älmhult Municipality, Småland, Sweden, a small town located at the south of Sweden. Although the company now owns 301 stores in 37 countries, the town of Älmhult still remains to be the heart of IKEA to this day. Of the 8000 people living in the town, 4000 are IKEA employees, also known as “co-workers”. The locals are provided with the opportunity to work in various fields and not just in the store located in the town. This is because located in the area are other buildings such as the IKEA test lab, the biggest catalogue studio, and the design unit known as the IKEA of Sweden. The locals’ love for IKEA is so strong that some consider it some kind of a cult. With the high employment rates of the locals, the company has become such an important part of the town that the history of Älmhult Municipality cannot be told without the mention of this grand company.

However, there are many negative reviews on IKEA, especially about their after-care services. One customer in Miami ordered kitchen cabinets, however, after calling the installation company for several weeks, she was told at last that they will not be able to install the cabinets for another 7 weeks. Their excuse was that they were too busy with customers from the last IKEA sale. When a customer in Brussels lost his purse with a voucher he received after buying a kitchen in it, he was completely ignored. He was not able to receive another voucher even after he showed the customer service the proofs of the payment bills and filed a police report. These reviews show that people all around the world struggle with IKEA’s after-care services, which could cause a decrease in number of customers in the future.

 

Also, those who live near IKEA stores have had to face traffic and neighborhood transformations, and this is why IKEA often has to deal with protests of local activists when planning to build a store. In Moscow, the government even blocked an overpass to the store because there were too many complaints.

CULTURE (education)

For 6 years between 2009 and 2014, IKEA Social Initiative, together with UNICEF and Vietnam’s Ministry of Education and Training, conducted a project in Vietnam to improve school enrolment rates of children from the 54 ethnic groups in the nation. Despite there were being schools that the children could attend, they were not well educated as the classes were conducted in Vietnamese and not in their respective native-languages. This caused the children to lose confidence in their school studies and lead to the high drop-out rates. In the hopes to improve the situation, the organizations held training sessions for pre-school and elementary school teachers. There, the teachers were educated with the indigenous languages and learnt various interactive teaching skills. IKEA also provided the schools with safe water supply, classrooms, teaching aids and other basics required for schools. The project succeeded to create nurturing mother tongue-based bilingual education in the schools and made learning more enjoyable for the ethnic group students. As a result, they were able to increase the enrolment rates of students from the ethnic minorities, helping a total of 120,000 students and 3,000 out-of-school adolescents.
IKEA has also donated $500,000 to a project which aims for the total elimination of child labour in Uttar Pradesh, which is one of India’s least developed states. The project is focusing on the introduction of education facilities.

ENVIRONMENT

IKEA is the third largest consumer of wood in the world behind Home Depot and Lowes. In November 1999, IKEA was introduced to a policy that prohibits the use of wood from intact natural forests and instead only allows the the use of ones certified by the Forest Stewardship Council. Nevertheless, IKEA stores are increasing in number, which could further affect the environment of the entire world negatively.
On the positive side, IKEA has a periodic recycling program, which allows customers to recycle old furniture in exchange for vouchers to purchase new ones. Plastic and metal components are recycled, and other components that cannot be recycled are burnt to generate energy. In 2012, IKEA released People & Planet Positive; IKEA Group and Sustainability Strategy for 2020. The company plans to become independent on resource and energy by using wood from sustainable sources, turning waste into usable resources and building solar panels and wind turbines. It also stated that “[IKEA] will produce more renewable energy than we consume throughout IKEA buildings and operations”.
In the Fiscal Year 2014 Sustainability Report, IKEA reported its progress that 41% of the wood used are from sustainable sources (FSC Certified or Recycled) and that 224 wind turbines and 700,000 solar panels are installed to generate renewable energy.

 

Week5 – Globalisation in the 21st Centry – positive or negative

We currently had only one class for the last two weeks due to the Okinawa school trip and “golden week”. This week we had IP lessons both on Monday and Wednesday: planning and preparing for each of our group presentation which will be presented next week.

In Monday’s class, we all looked at four different texts stuck on the wall, thinking about any positive and negative aspects of globalization. While reading the texts, we took notes on something which each of us was interested in. Majority of us thought that there are more positive effects but few of us thought there are actually negative effects of globalization that there would be more and more disparity between poor and rich and it will reach the point where nothing would be able to help it. Additionally, the bigger companies would take over the local commerce (small companies); therefore, minority groups will suffer in the future. I personally think that globalization in the 21st century can be largely positive if people who have an access to the Internet or advanced technology willingly help minority people who are in needs of help.

In Wednesday’s class, we saw a video which summarized one global mind and world globalization from four different points of view: innovation, economics, society and people’s quality of life. At this time from our class discussion, I realized that the spread of terrorism is also one of the negative aspects of globalization.

Then, we spent the rest of the class time on searching and planning for our group presentation next week. My group will present how globalization has affected traditional Maori people in New Zealand. I look forward to seeing all the presentations from the other groups to see how globalization has affected different people and culture in different specific areas of the world!!

3413 Ayumi Kobayashi

Week 4 – Starting to interact with Globalization

Unlike other classes we’ve had so far, this week’s class was most focused on working in our groups for our mid-term presentations.

Last week, since the third years were on a trip to Okinawa, we only had an hour of International Perspectives going over the history and a summary of the three stages of globalization.

In the beginning, we looked over a company that is well known for its global network, Starbucks. In our groups, we discussed the pros and cons of the five keys of globalization: Culture, Society, Environment, Economy and Politics. Our group discussed about the society aspect on the subject. We came up with the ideas that the pros of society globalization of Starbucks is that it creates a network of trust around that company. No matter where people go, they will know the origins and taste of Starbucks Coffee. Instead of a local coffee shop, it’s something they know and understand in any part of the world. As young teens, we know the price of Starbucks can be a little out of our price range. Yet, there are so many young adults drinking Starbucks on a weekly basis. This creates a gap between those who can afford it and those who cannot. The “image” creates the wealth gap that is negatively effecting developing teens with their self-confidence.

Other groups discussed both the positive and negative effects of knocking on other businesses. On one hand, Starbucks creates a network were big companies work together on promoting each other. On the other hand, it makes local small companies go out of business making the town/city less authentic.

My group hasn’t fully decided on what to research but we have an idea that we would like to focus on a clothing brand. Hopefully, we will be able to figure out a specific brand by the next class and be able to start the research. I can’t wait to see how my group presentation turns out!

3602 Erika Aoyagi

Week 3 – The Three Stages of Globalisation

In this week’s class, we discussed about the three stages of globalization. As we had researched about the three stages individually for homework beforehand, we got into three groups and each group discussed the stages they had researched. After discussing about the stages in our groups, we spent the rest of the class presenting about the three eras.

The first group talked about the first era which is throughout 1492-1800s. Globalizaion 1.0 is the globalization of countries. It began with the voyage of Christopher Columbus following with Europeans voyages that lead to the formation of Europe’s colonial empires. During this era, Friedman believes that the world changed from size large to medium due to the development of ships. As ships were invented and developed, different countries were able to connect with each other, therefore it lead to the globalization of countries.

The second group presented about the globalization 2.0, which is about the globalization of companies. In this era Friedman says that the world shrank from medium to small. This is because of the the advancement of transportation. Due to this, companies were able to transport their products around the world, and people were able to travel around the world which lead to the rise of international connectivity.

My group, which was the third group introduced globalization 3.0, which is about the globalization of individuals. This stage is from 2000 to now and it is where the individuals are able to globalize due to the development of technology. The advancement of the internet and computers allow the individuals to connect with people and companies no matter how far you are, which gives individuals the chance of becoming more global.

After each group had introduced each of the stages they had researched about, we discussed as a class and realised that globalization centres around the development of technology. We found out that without technology, humans would have not been able to globalize in any way, as we would not have been able to get access with other countries.

I am looking forward to the group blog post as I have never done this sort of assignment before. I am excited to see how each group will construct their blog to make it informative yet interesting at the same time.

3335 Haruna Takaoka

Week 2 – The History of Globalisation

After brainstorming briefly about globalization in previous class, we learned about the history of globalization in today’s class. We read about the Neolithic age, which is thought to be the beginning of globalization. We also learned that the Neolithic age is characterized by the domestication of animals and plants, agriculture, pottery, and megalithic architectures such as the Stonehenge. The transition from the Mesolithic to the Neolithic was drastic because it changed the structure of society and the way people lived. With the advancement of agriculture and technology, there was more food, which meant more people, forming groups that share the same stone tool technology. Moreover, with a stable food supply, people became sedentary – staying in one certain place. I think this sedentism made people aware of their identity, territory, and own distinctive culture, and started recognizing other communities as extraneous or foreign.
It’s connected to globalization because different people of different communities began to interact and exchange cultures.
I think it is amazing how almost 11,000 years ago, humans built the same type of society as we are familiar with today. The basic structure is still the same, but just the interaction covers the whole globe now. But they are different in a sense that the exchanges only occurred in certain limited area instead of the whole world. It was interesting to discuss about similarities and differences of the differing forms of globalization with my group members. I will try to be more vocal about my opinions next time.

In the second class of the week, we researched about our own cases of globalization before Columbus found America in 1492. I researched about the Hellenistic period when Alexander the Great created a large empire that stretched all the way to India. When he was in reign, he got his men to marry local women and built many Greek inspired cities like Alexandria. I’ve been to the ruins of Nemrut Dag and Pergamon, which are Hellenistic cities in Turkey. Those remains clearly had Greek tastes in them, but simultaneously, I saw some Persian elements in them. I was fascinated by how the fusion of Greek and local cultures created a whole new beautiful art. I was dumbfounded to find out that the word Cosmopolitan was invented in this time… The Macedonian King must have had a global way of thinking!
Looking at other people’s cases like Genghis Khan and the Ottoman Empire, I discovered one pattern that is common in every case. One can facilitate the movement of people, money, and things by fighting wars and expanding territories. The conquered land is “safe” and “peaceful” since they have been integrated to the empire. Therefore, there was nothing, no borders or tariffs that interfere with the dynamism of things, ideas and more. Still, it was a small-scale globalization compared to the 21st century version where the world literally becomes so tiny like one of those model globes I have at home.
One presentation I found intriguing was Haruka’s case: Christianity. The idea of religion as a tool of unification was very unique to me. The same can be said about Islam, but Christianity accepts everyone, not taking account of people’s race, gender, and social class as long as you believe in Christianity. This idiosyncrasy of Christianity is what caused it to spread so widely around the world, especially Europe. I think religion may be a more universal means of globalization than conquest by power because the beliefs stay in people’s heart and are passed on to younger generations.

Finally, we learned about three eras of globalization; 1492-1800, 1800-2000, and  2000-the present, led by countries, companies and individuals respectively. Since individuals are the smallest unit of society, I wonder what globalization will come to be in the future.
I’m excited about the group presentations because I want to refine my communication skills including communication with other members of the groups as well as with the audience.

3512 Maho Kanno