Globalization: Advantages And Disadvantages Of Global Value Chains

Globalization: one word, multiple international operations that are constantly shaping the world we live in today, trying to eliminate barriers of any kind. Globalization can be regarded as a quite complex word referring to a multi-faceted phenomenon that can be quite arduous to define: Charles W.L. Hill (HILL, 2000) has attempted this task by defining globalization as “the shift toward a more integrated and interdependent world economy”. It would be hard to imagine today’s world without globalization: McDonald’s, Apple and Samsung can be perceived as useful examples of firms whose name is closely linked to the idea of Globalization, as in the last decades they have opted for either Foreign Direct Investment or international production that …show more content…
In this case scenario, engaging in FDI like Samsung did could keep the lead firm away from problems like the one examined above. Furthermore, Colin Haslam, Nick Tsitsianis and Y Ping Yin (2013) also state that “Samsung also runs its manufacturing facilities and this account’s for the relatively higher share of labour costs in value retained. It manufactures screens, chips and other parts for its smartphones and tablets in comparison to Apple which designs its devices but relies on outsourcing”(ibid). At this point this would lead us to believe that sometimes a firm might try to avoid such operations due to the fact that relying on suppliers that are in a certain way unstable or that could become potential competitors: in this scenario engaging in FDI could be a better decision, since relying excessively on suppliers could lead to major