 Economy is really subject to different ups

and downs due to several factors. Monetary

system and financial institutions play a
significant role in the market flows. The rise
of global corporations paves the way for
more capital flow, continuous need for
products and services, and creation of more
employment opportunities.
With this module, the students must:

 Explain the role of international financial

institutions in the creation of a global
economy;
 Narrate a short history of global market
integration in the 20th century; and
 Identify the attributes of global corporations.
 Functions and Constitution of a Global
Corporation, BRICS Economies, Non-Equity
Modes of Production, Interactive Global
Patterns Brought by Global Corporations
Group Game – The class will be divided into two
groups with representatives who will give the
name of the corresponding companies for the
items below. The class will have to identify if
the given companies are either local or
international. The group with the most number
of international companies being answered will
win.

1. Burger 6. Ice Cream

2. Softdrinks 7. Chocolates
3. Face Powder 8. Rubber Shoes
4. Shampoo 9. Clothing Line
5. Chips 10. Bags
Points to Discuss:
 Why is it that that particular company comes
into your mind when you heard of the item?
 Do you think the said company helps our
economy? How?
 Do you believe that the local Filipino
companies can compete with these
international companies? How?
 Global corporations are inseparable to the
phenomenon of globalization.

* Early historical period – globalization

followed complex patterns of interactive
engagements organized through trade and
directly influenced by the emergent and
dominant technologies especially in shipping
and navigation (Harvey, 1990).
 The History of Global
Corporations

 Colonialism and Imperialism

 Post
World War II era where it was dominated
by American Corporations

 There-entry of Japanese and European

Corporations back to world market
 Thecontemporary global corporation is
simultaneously and commonly referred to as
multinational corporation (MNC) or
transnational corporation (TNC).

 They are either an international company or

a global company
 Internationalcompanies are importers and
exporters, typically without investment
outside of their home country.

 Multinational companies have investment in

other countries, but do not have coordinated
product offerings in each country. They are
more focused on adapting their products and
services to each individual local market.
 Globalcompanies have invested in and are
present in many countries. They typically
market their products and services to each
individual local market.

 Transnational companies are more complex

organizations which have invested in foreign
operations, have a central corporate facility
but give decision making, research and
development, and marketing powers to each
individual foreign market.
TNC – Transnational Corporation: An enterprise
that engages in activities which add value
(manufacturing, extracting, services,
marketing) in more than one country (UNCTC,
1991).

These types of corporations are called under

the generic name of GLOBAL CORPORATIONS.
Foreign Direct Investment (FDI) is construed to
be one of the major elements of the global
economic development.

1960-principal turning point for FDI as the major

driver of extended global corporate
development.

1985-1990 – it grew at an average rate of 30% a

year.

Due to an increase in FDI, some 20,000 new

corporate alliances were formed in the period
of 1996-1998 (Gilpin, 2000).
3 FUNDAMENTAL INNOVATIONS:

 The advent and impact of digitalization and

instantaneous global communications.
 The structural transformation of global
commerce from producer-driven commodity
chains to buyer-driven.
 The increasing role performed through the global
system by financial elements and the emergence
of global financial firm.
3 STRUCTURAL PERIODS:

 Investment-based Globalization (1950-1970)

 Trade-based Globalization (1970-1995)

 Digital Globalization (1995-onwards)

 Investment-based Globalization (1950-1970)
- dominated by producer-driven commodity or
value chains & tended to be dominated by firms
with large amounts of concentrated capital on
large-scale or capital-intensive manufacturing or
extractive industries.
- transformation in the dominant manufacturing
firms of older developed companies to a more fully
extended & integrated organizational forms to a
more authentically global firms which required
extensive corporate integration of their activities
throughout the world.
 Trade-based Globalization (1970-1995)
- the more buyer-driven a country is, the more
nodes exist within their networks and the greater
either their interdependence on other actors or
their imperative to establish extensions of supply,
finance and others.
 Digital Globalization (1995-onwards)
- Global corporate structures & operations can be
viewed within the ever-changing digital
environment as framed by the constant need to
develop & adapt.
- Symbolic Capital – evident in the increasing value
& importance placed on the branding created &
owned by the GCs.
- Brand Finance – a discipline that ranks
corporations in global league tables on the brand
value parallel to their ranking by various entities in
terms of their aggregate revenue, earnings, etc.
 Digital Globalization (1995-onwards)
DIGITALIZATION is transforming the classic value
chain of manufacturing focused on innovation in
which:
- Product design & innovation are replaced with
driving innovation through digital product design
- Labour intensive manufacturing is replaced by
digitizing the factory shop floor
- Supply chain management is replaced by
globalizing through digital supply chain management
- Marketing sales & service is replaced by digital
customization
(Capgemini, 2012)
 Digital Globalization (1995-onwards)

DIGITALIZATION leads to:

- producer-driven streams have progressively
integrated their corporate structures to reduce
effects of time & distance for services such as
design, finance, accounting, advertising, brand
development, legal services, inventory control, etc.
- buyer-driven streams become digital with
companies’ specialization in Internet retailing of
goods & services continuing to gain market share
over fixed in place marketing and selling.
 Digital Globalization (1995-onwards)

DIGITALIZATION leads to the Quick Response (QR)

Management System
- the dominant system operates within &
between global corporate structures with 3 steps:

1. Retailers adopt integrated electronic point of

sale technologies which allow for instantaneous
communications between sales, reordering &
production units, and delivery control.
 Digital Globalization (1995-onwards)

2. Firms redesigned internal management

practices for faster turnaround of merchandise and
allow for more effective inventory control.

3. Retailers and manufacturers establish an

integrated supply chain with joint product
development planning & inventory control.

(Cammet, 2006)
• Interlocks that exist in the “network of corporate
control”

• Vitali, Glattfelder, and Battison (2011) – made a

study and findings showed that a very highly
concentrated structure of ownership and
interlocks and a network structure dominated by
a very dense core remained in the hands of the
firms within the core itself.
 Brazil, India, and China
 Havebecome the most dynamic sector of the
global corporate growth.

 Represented in part by their significant FDI

over the past three decades.
 Theimportance of global corporations in
Brazil, India, and China to the current and
projected global economy is singular

 Withforty percent of the world population,

BRICS economies represent a primary force in
both global production and consumption.

 TheBRICS were unaffected by the US and

European Markets in 2007.
 In relation to China, some globalist views it as
having connection with the old socialist order
since many of China’s global corporation are
owned and controlled by the state (‘state-owned
corporations’). They are, in a way financed by
the state, and are also, in a way, “endorsed” by
the state to its ready buyers.

 The BRICS economies is the new face of the

global corporate reality as their strong domestic
markets and their ability to gain capital from
within their host countries.
 NEMS – Non-equity modes of production.

 Have become an increasingly important form

of global corporation within the emerging
economies.
 Represent an increasingly vast network of
relationships in which global production chains
are assembled through
 contract manufacturing,
 services outsourcing,
 contract farming,
 franchising,
 licensing, and
 management contracts.
* Viewed as ‘externalization’ for corporation which gains
access to benefits within global value chains without
direct investment of comparable amounts of capital
albeit at the cost of relinquishing elements of control &
at reduced profit levels.
1. Those that have arisen as a result of growing
national power of the host country responding to
the need to aggregate & deploy national capital to
provide the bases for economic development.
2. Those that have focused on replicating major
consumer pathways in both developed and
developing markets.
3. The NEMs which works through contract & other
relationships with developed market firms by
gaining access to & exploitation of superior
innovative technology.
 Lessened regulation by governments.

 Therequirement of the so called corporate

social responsibility (CSR).

 Check and balances provided by NGOs.

 Needfor regulation of the global financial

market.
 After
World War II, global corporations were
viewed as agents of desired economic
development.

 FDIs were in demand throughout the world.

 Bythe end of the 1960’s onward, global

corporations were viewed as gaining their
economic prominence through a variety of
socially destructive means.
 Global
corporations are viewed as agents of a
system that on balance was resulting to
 greater global wealth inequality,
 income inequality,
 lack of effective worker protection,
 environmental degradation,
 producing natural cultures of corruption
through corporate collusion,
 and in some instances, threatened
national sovereignty.
Global corporations are now
very powerful that they can
create a financial crisis if they
want to.
 Global inequality

 Thesystematic stability and viability of the

global financial system

 Climate issues
 The likelihood that continued global
interdependence will produce outcomes
favourable for the world as a whole will
depend in large part on the willingness of
global corporations to embrace the
importance of these global goods and their
responsibilities for them.
Watch the listed documentaries below. Present the synopsis
to the class and make them analyze what made them
successful.
1. Steve Jobs: One Last Thing
 Regardless whether we're Apple fans or not, most of us
respect what Steve Jobs accomplished at a company he
left and returned to, rescuing it from the brink of failure.
Originally airing on PBS in November 2011, Steve Jobs: One
Last Thing takes a closer look at this visionary through
interviews that discuss how his talent, style and
imagination changed the world.
2. American Experience: Henry Ford
 How a farm boy rose to become one of the greatest
innovators of the 20th century. From PBS's documentary
miniseries on American history, American Experience:
Henry Ford chronicles the life of the famous
automobile maker. It follows Ford from boyhood to mogul
and reveals how he forever changed the way we work and
manage businesses.
IDENTIFICATION. Identify what is being asked in the items.
Write your answers on the lines before the numbers. (10
points)

______________________________1. It is dominated by
producer-driven commodity and firms with large amounts of
concentrated capital on large-scale industries.
______________________________2. They have investments in
other countries but they tend to adapt their
products/services to their local market.
______________________________3. It is an entry of private
capital from a source which is external to a country into the
receiving country.
______________________________4. It is a system used in
Digital Globalization which operates within and between
global corporate structures.
______________________________5. According to UNCTC, it is
an enterprise that engages in activities which add value in
more than one country.
______________________________6. In the 2007-2008
Financial Crisis, it has become a new and important source
of capital within the global system.
______________________________7. It represents an
increasingly vast network of relationships in which global
production chains are assembled through contract
manufacturing, services outsourcing, contract farming,
franchising, licensing, and management contracts.
______________________________8. It is the largest
developing country outward investor with estimated holdings
of US $ 1 Trillion in 2009.
______________________________9. It is a set of proposed
governance structures including rules, norms, code of
conduct and standards to render the GCs more accountable
to their stakeholders.
______________________________10. It is a period wherein
the more buyer-driven a country is, the more nodes exist in
their networks and the greater the interdependence on other
actors to establish extensions of supply, finance and others.
Do you agree on a bill passed by the House of Representatives stipulating
100% foreign-owned utility companies in the Philippines?

House passes bill allowing 100% foreign ownership of public

services
Published 5:07 PM, March 10, 2020
Updated 4:56 PM, April 14, 2020
Mara Cepeda (Rappler)

MANILA, Philippines (UPDATED) – The bill that would allow foreigners to

fully own public services like transportation, communication, and
power firms in the Philippines successfully hurdled the House of
Representatives.
On Tuesday, March 10, 136 lawmakers voted yes to House Bill (HB) No.
78, which would give a distinction between how a public service and
a public utility is defined under Commonwealth Act No. 146 or the
Public Service Act, in effect allowing foreigners to fully own public
services in the Philippines.
A total of 43 legislators – including several allies of President Rodrigo
Duterte – voted against the bill, while one abstained from the vote.
Under HB No. 78, public services are those which are "non-rivalrous or
imbued with public interest," such as:
 Marine repair shop
 Wharf or dock
 Canal
 Public market
 Irrigation system
 Gas
 Electric light
 Heat and power
 Water supply and power
 Petroleum
 Sewerage system
 Telecommunications system
 Wire or wireless communication system
HB No. 78 then limits the definition of public utility to any person
or entity that operates, manages, or controls for public use the
distribution of electricity, transmission of electricity, water
pipeline distribution, and sewerage pipeline.
But HB No. 78 not only makes a distinction between public
services and public utilities, it also leaves out the 60-40
constitutional rule on foreign ownership.
The Senate version of the bill remains pending at the committee
level. It has to be approved by senators on 2nd and 3rd
readings before Duterte can sign it into law.
Opposition lawmakers have long argued the measure
is unconstitutional.
This is because Section 11, Article XII of the 1987 Constitution
currently reserves the ownership, operation, control, and
management of public utilities to Filipino citizens or to
corporations or associations, and at least 60% of its capital
stock should by owned by Filipinos.
Gabriela Representative Arlene Brosas said the bill would now
allow foreigners to own "critical" public services like
telecommunications and transportation.
She also said the passage of HB No. 78 "more or less fulfills the
goal of economic charter change without tinkering with the
1987 Constitution."
"Foreign ownership of our mobile communication services, mass
transits, and oil extraction will not improve the quality of
services. Rather, it will leave us all vulnerable to external
shocks and risks at the expense of course of ordinary
consumers, in the form of higher fares and fees," she added.
But House committee on economic affairs chairperson Sharon
Garin, who sponsored HB No. 78 in the plenary, said it does not
violate the Constitution.
She cited jurisprudence from the Supreme Court (SC) in the JG Summit
Holdings vs Court of Appeals case, where the justices upheld the
removal of shipyards from the definition of public utility.
Garin also said that in the National Power Corporation vs Bataan
provincial government case, the SC also ruled that "power generation
is no longer considered a public utility operation."
"The Supreme Court has upheld the removal of sectors previously
considered public utilities.... It should be further emphasized that
[the bill] is entitled to the presumption of constitutionality which
every treaty, executive agreement, and statute enjoys," the AAMBIS-
OWA representative said in a statement.
"The burden of proof is on the petitioner to clearly demonstrate that the
assailed statute is unconstitutional," she added.
Garin previously said HB No. 78 would help improve the "deplorable
state" of the Philippines' public services by giving more leeway for
foreign direct investments.
Discuss the pros and cons of the said bill.
 ____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
____________________________________________________________
Claudio, Lisandro E. and Patricio Abinales. 2018. The
Contemporary World. C & E Publishing, Inc. Quezon
City.
Steger, Manfred B., Paul Battersby, and Joseph M.
Siracusa, eds. 2014.The SAGE Handbook of
Globalization. Two volumes. Thousand Oaks: SAGE
Publications.
Saluba, Dennis J., Carlos, Abigeil F., Cuadra, Jovy F.,
Damilig, Angelita D., Corpuz, Raizza P., Endozo,
Maria Lorena A., Pascual, Marilou P., Hermogenes,
Michael C., and Capacio, Jocelyn G. 2018. The
Contemporary World. Panday-Lahi Publishing House,
Inc. Muntinlupa City.