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Globalisation and Government Regulation in Uk

Decent Essays

Introduction ‘Think global ', ‘Act local ' is a common phrase used by executives, companies in the UK have been heavily impacted by globalisation due to the benefits of attractive cheap labour available overseas, establish subsidiaries to overcome exportation, producing globally standardised products to achieve economies of scale and gaining a market share in local/region of a country. This is the age of globalisation, a term which has numerous definition (Dunning, 1997), but generally refers to a process of "tighter international linkages on a world-wide scale" (De Wit and Meyer, 1998). On the other hand, UK has also become a major host country for foreign multinational investment. Corporate interests shed light on market share-hold …show more content…

Traditional manufacturing countries mainly situated in the South-east Asia and Eastern Europe have gained corporate interests in attractive cheap labour (Meffert and Bloch, 1991). The loss of jobs contributes to the already worsening problem of unemployment and harms regional economy. A BBC report (Davis, 2003) shows that "Factory production fell by 4% in 2002, the largest annual slump since 1991" Corporate Insolvencies has occurred because companies are unable to keep up with global integration. MG Rover went into administration on April 8, with the loss of over 5,000 jobs (Harwood, 2005) Similar threats are also emitted from the service industry where there seems to be a trend towards outsourcing services to low labour cost countries e.g. call-centres to India. Such business voyage is encouraging as BT 's turnover increased by 11 percent in 2002 (Turner and Gardiner, 2007). Again the argument is about job loss; in addition, the pressure to out-source may cause businesses to drive down ‘real pay ' levels in order to compete more effectively (Blackwood, 2006). On the other hand, foreign investments have also created jobs in the UK. The amount of opportunities created depends on • Direct jobs: size of the foreign owned industry and the intensity of its production process. • In direct jobs: referring to the connections with local suppliers and their reputation. The UK government estimated that

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