Global Context of Modern Business

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Tutorial 6

Corporate and Political power

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Car industry• Fordism

• Mass production• Mass consumption

• Utilisation of semi-skilled labour• Leading to the rise on living

standards• Truly global business

• 1 car out of four is produced in china

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Car industry

Rank CountryCars

produced% of total

world production

1 China 14,485,326 24.0%

2 Japan 7,158,525 11.9%

3 Germany 5,871,918 9.7%

4 South Korea 4,221,617 7.0%

5 India 3,038,332 5.0%

6 U.S.A. 2,966,133 4.9%

7 Brazil 2,534,534 4.2%

8 France 1,931,030 3.2%

9 Spain 1,819,453 3.0%

10 Russia 1,738,163 2.9%

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Car industry

• Three period of dominance studies by Lugar

• 1916-1960s• Business dominance over government policy

• - 1970s• Bargaining and compromise

• -1988• Triumph for the car industry

• Donation to the political parties• Expert hiring government – industry- government

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Car industry

• Availability of resources that is unmatched by the government• Lobbying• Association (Society of Motor Manufacturers and Traders)

• 1.6 million cars and 2.5 million engines• The world’s largest number of specialist vehicle manufacturers

based in the UK• 59 Billion turnover• 700 000 jobs• 10% of total UK exports• 80 % produced exported• 1.7 Billion investment in R&D (technical research) ….

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Supermarkets• Four large companies

• Tesco• Asda (Wal-Mart)• Sainsbury’s• Morrisons

• Increased power of sellers• Price competition• Low-prices achieved by sacrifices made by suppliers• Low prices paid to overseas farmers• Closure of smaller shops• Health issues• Air (transportation) miles• Lowest paid jobs in the UK• Graduate role at Lidl £35000+benefits+bonus)