GlobalisationGlobalisation

The Brand Goes GlobalThe Brand Goes Global

Globalising ConverseGlobalising Converse

As we have seen in class, companies no longer operate within national boundaries. They can not only market products on a worldwide scale, they

can also move their base of production to countries where cheap labour and tax breaks are

available. The rationale is generally financial.

More than just a shoe, the Converse Chuck Taylor All Star became an American Cultural Icon. By

looking at their history, we can also see a snapshot of America’s role in Globalisation.

As we have seen in class, companies no longer operate within national boundaries. They can not only market products on a worldwide scale, they

can also move their base of production to countries where cheap labour and tax breaks are

available. The rationale is generally financial.

More than just a shoe, the Converse Chuck Taylor All Star became an American Cultural Icon. By

looking at their history, we can also see a snapshot of America’s role in Globalisation.

Early Advertisement

for All Stars

Early Advertisement

for All Stars

From http://sneakers.pair.com/

chucks.htm

From http://sneakers.pair.com/

chucks.htm

The Early History of ConverseThe Early History of Converse

1908 – Marquis M. Converse opens the doors of the Converse Rubber Shoe Company in Malden, Mass., USA. He starts the company with winterized footwear for men, women and children.

1910 – Converse produces 4,000 shoes daily 1915 – Converse canvas tennis shoe business

climbs, doubling by 1918 1917 – World’s first performance basketball

sneaker debuts – the Converse All Star

1908 – Marquis M. Converse opens the doors of the Converse Rubber Shoe Company in Malden, Mass., USA. He starts the company with winterized footwear for men, women and children.

1910 – Converse produces 4,000 shoes daily 1915 – Converse canvas tennis shoe business

climbs, doubling by 1918 1917 – World’s first performance basketball

sneaker debuts – the Converse All Star

From http://www.insidehoops.com/converse-history.shtml (Accessed 5th Feb 2007)

Converse SuccessConverse Success

1923 – THE pinnacle moment in the history of Converse: Converse adds Chuck Taylor’s signature to the All Star® patch, giving birth to what would become an American icon.

1930s - 1950s: The nation’s interest in basketball surges. Games are also televised overseas, increasing awareness of Chucks.

1923 – THE pinnacle moment in the history of Converse: Converse adds Chuck Taylor’s signature to the All Star® patch, giving birth to what would become an American icon.

1930s - 1950s: The nation’s interest in basketball surges. Games are also televised overseas, increasing awareness of Chucks.

Concurrently, Converse’s record-breaking war manufacturing effort earns it the United States’ “E for Excellence” distinction. Hollywood helps the wildly popular shoes transcend the sport to become deeply entrenched in popular American culture, like jeans and soda.

Concurrently, Converse’s record-breaking war manufacturing effort earns it the United States’ “E for Excellence” distinction. Hollywood helps the wildly popular shoes transcend the sport to become deeply entrenched in popular American culture, like jeans and soda.

From http://www.insidehoops.com/converse-history.shtml (Accessed 5th Feb 2007)

Converse and WWIIConverse and WWII

When America entered World War II in 1941, Converse shifted production to manufacturing footwear, apparel, boots, parkas, rubber protective suits, and ponchos for pilots and troops.

The war provided great exposure for their shoes, as the US Military adopted the Chuck.

When America entered World War II in 1941, Converse shifted production to manufacturing footwear, apparel, boots, parkas, rubber protective suits, and ponchos for pilots and troops.

The war provided great exposure for their shoes, as the US Military adopted the Chuck.

Widely popular during the 1950s and 1960s, Converse lost much of its apparent near-monopoly from the 1970s onward, with the surge of new competitors such as Nike, Adidas and Reebok who introduced radical new designs to the market.

Widely popular during the 1950s and 1960s, Converse lost much of its apparent near-monopoly from the 1970s onward, with the surge of new competitors such as Nike, Adidas and Reebok who introduced radical new designs to the market.

From http://en.wikipedia.org/wiki/Converse

Converse Goes OverseasConverse Goes Overseas

This loss of market share, combined with poor business decisions forced Converse to file for bankruptcy on January 22, 2001. When the company subsequently changed hands that year, the last factory in the United States was closed.

This loss of market share, combined with poor business decisions forced Converse to file for bankruptcy on January 22, 2001. When the company subsequently changed hands that year, the last factory in the United States was closed.

Thereafter, manufacturing for the American market was no longer performed in the United States, but instead in a number of Asian countries, including China, Indonesia and Vietnam.

On July 9, 2003, the company accepted a $305 million purchase offer from rival Nike.

Thereafter, manufacturing for the American market was no longer performed in the United States, but instead in a number of Asian countries, including China, Indonesia and Vietnam.

On July 9, 2003, the company accepted a $305 million purchase offer from rival Nike.

From http://en.wikipedia.org/wiki/Converse

The Return of the ChuckThe Return of the ChuckIn the early 21st Century, the Converse Chuck Taylor All-

Star is the most successful shoe in history, and has enjoyed

recent popularity thanks to a resurgence of “old skool”

trends. Over 750 million pairs have been sold worldwide.

They no longer seem to be worn by their original target

market of basketballers (at least not in the professional

sphere), but instead they are now marketed to the

mainstream teenager. Some are so enthusiastic about the

sneakers that they have a vast, ever-growing collection.

They are also quite influential in pop-culture; Converse

Chuck Taylor All-Stars have been popular for decades in the

American punk and indie rock scenes, and Hollywood has

popularized Chucks in countless motion pictures.

In the early 21st Century, the Converse Chuck Taylor All-

Star is the most successful shoe in history, and has enjoyed

recent popularity thanks to a resurgence of “old skool”

trends. Over 750 million pairs have been sold worldwide.

They no longer seem to be worn by their original target

market of basketballers (at least not in the professional

sphere), but instead they are now marketed to the

mainstream teenager. Some are so enthusiastic about the

sneakers that they have a vast, ever-growing collection.

They are also quite influential in pop-culture; Converse

Chuck Taylor All-Stars have been popular for decades in the

American punk and indie rock scenes, and Hollywood has

popularized Chucks in countless motion pictures.

Converse in the World MediaConverse in the World MediaRecent success for the All Star is due to exposure in global

media. Here are a few examples:

# In the first season of 24, Rick Allen is wearing a pair of blue Chuck Taylor All-Stars.

# B.J. Hunnicutt, in the television series M*A*S*H, is always seen wearing a pair of black hi-top Chuck Taylor

All-Stars.

# In the British sci-fi series Doctor Who, the signature costume of the Tenth Doctor includes a pair of cream, black

or maroon Chuck Taylors, depending upon the Doctor's choice of a brown or blue suit.

# Most of the boys in The Wonder Years wear white or black Chuck Taylors throughout most of the series.

Recent success for the All Star is due to exposure in global media. Here are a few examples:

# In the first season of 24, Rick Allen is wearing a pair of blue Chuck Taylor All-Stars.

# B.J. Hunnicutt, in the television series M*A*S*H, is always seen wearing a pair of black hi-top Chuck Taylor

All-Stars.

# In the British sci-fi series Doctor Who, the signature costume of the Tenth Doctor includes a pair of cream, black

or maroon Chuck Taylors, depending upon the Doctor's choice of a brown or blue suit.

# Most of the boys in The Wonder Years wear white or black Chuck Taylors throughout most of the series.

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Global MediaGlobal Media

* Rapper Tupac Shakur in the track California Love raps "in L.A. we wear Chucks not Ballys"

* Ice Cube in the song Friday (for the movie of the same name): "He's bout hard as Darth Vada

in his sweat shirt, khakis and Chuck Taylors. Just see him in the drive way, gettin beat like a smoka fool 'cuz it's Friday."

* The All American Rejects (Tyson Ritter,Nick Wheeler, Chris Gaylor, and Mike Kennerty) wear Converse in their music videos.

* Rapper Snoop Dogg makes references to "Chucks" in his songs. From rapper WC, "Steppin' out the Navigator with braids

and Chuck Taylors" - Cheddar

* A pair of black Converse One Stars were Kurt Cobain's preffered pair of shoes. On rarer occasions, has also been seen

wearing all stars. Cobain wore one stars when he deceased, and can be seen on the suicide photo

* Rapper Tupac Shakur in the track California Love raps "in L.A. we wear Chucks not Ballys"

* Ice Cube in the song Friday (for the movie of the same name): "He's bout hard as Darth Vada

in his sweat shirt, khakis and Chuck Taylors. Just see him in the drive way, gettin beat like a smoka fool 'cuz it's Friday."

* The All American Rejects (Tyson Ritter,Nick Wheeler, Chris Gaylor, and Mike Kennerty) wear Converse in their music videos.

* Rapper Snoop Dogg makes references to "Chucks" in his songs. From rapper WC, "Steppin' out the Navigator with braids

and Chuck Taylors" - Cheddar

* A pair of black Converse One Stars were Kurt Cobain's preffered pair of shoes. On rarer occasions, has also been seen

wearing all stars. Cobain wore one stars when he deceased, and can be seen on the suicide photo

Converse SweatshopsConverse Sweatshops

From 2001 onwards, the “essential” American Footwear was no longer made in America. It was instead made in Asian countries where workers were paid very little for their labour.

From 2001 onwards, the “essential” American Footwear was no longer made in America. It was instead made in Asian countries where workers were paid very little for their labour.

In 1998, with production already being moved overseas, the head of NIKE told the National Press Club that he is "proud, not ashamed" of Nike operations, wages and facilities in Korea, Taiwan, China, Singapore, Thailand and Pakistan.

In 1998, with production already being moved overseas, the head of NIKE told the National Press Club that he is "proud, not ashamed" of Nike operations, wages and facilities in Korea, Taiwan, China, Singapore, Thailand and Pakistan.

From http://chucksconnection.com/articles/ConverseArt16.html

Multi-National CorporationsMulti-National Corporations

A multinational corporation (MNC) or multinational enterprise (MNE) or transnational corporation (TNC) or multinational organization (MNO) is a corporation or

enterprise that manages production establishments or delivers services in at least two countries.

A multinational corporation (MNC) or multinational enterprise (MNE) or transnational corporation (TNC) or multinational organization (MNO) is a corporation or

enterprise that manages production establishments or delivers services in at least two countries.

Corporations and GlobalisationCorporations and Globalisation

Multinational corporations have a powerful influence in international relations, given their large economic influence in politicians' representative districts, as well as their extensive financial resources available for public relations and political lobbying.

Multinational corporations have a powerful influence in international relations, given their large economic influence in politicians' representative districts, as well as their extensive financial resources available for public relations and political lobbying.

Multinationals have played an important role in globalization. Given their international reach and mobility, prospective countries, and sometimes regions within countries, must compete with each other to have MNCs locate their facilities (and subsequent tax revenue, employment, and economic activity) within.

Multinationals have played an important role in globalization. Given their international reach and mobility, prospective countries, and sometimes regions within countries, must compete with each other to have MNCs locate their facilities (and subsequent tax revenue, employment, and economic activity) within.

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Race to the BottomRace to the BottomTo compete, countries and regional political districts offer incentives to

MNCs such as tax breaks, pledges of governmental assistance or improved infrastructure, or lax environmental and labor standards.

This process of becoming more attractive to foreign investment can be characterized as either a race to the bottom, a push towards greater

freedom for corporate bodies, or both.

Because of their size, multinationals can have a significant impact on government policy primarily through the threat of market withdrawal.

For example, in an effort to reduce healthcare costs, some countries have tried to force pharmaceutical companies to license their patented

drugs to local competitors for a very low fee (thereby increasing competition in that drug category and lowering the price). When faced

with that threat multinational pharmaceuticals firms have simply withdrawn from the market, which often leads to limited availability of advanced drugs. In those cases, governments have been forced to back

down from their efforts.

To compete, countries and regional political districts offer incentives to MNCs such as tax breaks, pledges of governmental assistance or

improved infrastructure, or lax environmental and labor standards. This process of becoming more attractive to foreign investment can be

characterized as either a race to the bottom, a push towards greater freedom for corporate bodies, or both.

Because of their size, multinationals can have a significant impact on government policy primarily through the threat of market withdrawal.

For example, in an effort to reduce healthcare costs, some countries have tried to force pharmaceutical companies to license their patented

drugs to local competitors for a very low fee (thereby increasing competition in that drug category and lowering the price). When faced

with that threat multinational pharmaceuticals firms have simply withdrawn from the market, which often leads to limited availability of advanced drugs. In those cases, governments have been forced to back

down from their efforts.

A Converse ExampleA Converse ExampleConverse might decide that they would like to open a

factory in Civite, in the Phillipines. However, a neighbouring district might decide that they would like to

benefit from the Company’s presence. The two districts would then fight it out to offer the lowest tax rates, or to cut

the requirement to offer healthy cover to workers or to change laws that might favour the worker in terms of, for

example, sick leave.

It would be like the Australian Government offering to cut the minimum wage to 50c an hour to attract overseas

business.

The areas countries create to attract business in such a manner are often called ‘Free Trade Zones’

Converse might decide that they would like to open a factory in Civite, in the Phillipines. However, a

neighbouring district might decide that they would like to benefit from the Company’s presence. The two districts

would then fight it out to offer the lowest tax rates, or to cut the requirement to offer healthy cover to workers or to

change laws that might favour the worker in terms of, for example, sick leave.

It would be like the Australian Government offering to cut the minimum wage to 50c an hour to attract overseas

business.

The areas countries create to attract business in such a manner are often called ‘Free Trade Zones’

Free Trade ZonesFree Trade Zones A free trade zone (FTZ) or

Export processing zone (EPZ) is one or more areas of a country where tariffs and quotas are eliminated and bureaucratic requirements are lowered in order to attract companies by raising the incentives for doing business there..

A free trade zone (FTZ) or Export processing zone (EPZ) is one or more areas of a country where tariffs and quotas are eliminated and bureaucratic requirements are lowered in order to attract companies by raising the incentives for doing business there..

Most FTZs are located in developing countries. They are special zones where (some) normal trade barriers such as import or export tariffs do not apply, bureaucracy is typically minimized by outsourcing it to the FTZ operator and corporations setting up in the zone may be given tax breaks as an additional incentive.

Most FTZs are located in developing countries. They are special zones where (some) normal trade barriers such as import or export tariffs do not apply, bureaucracy is typically minimized by outsourcing it to the FTZ operator and corporations setting up in the zone may be given tax breaks as an additional incentive.

FTZsFTZs Usually, these zones are set

up in underdeveloped parts of the host country, the rationale being that the zones will attract employers and thus reduce poverty and unemployment and stimulate the area's economy. These zones are often used by multinational corporations to set up factories to produce goods (such as clothing or shoes).

Usually, these zones are set up in underdeveloped parts of the host country, the rationale being that the zones will attract employers and thus reduce poverty and unemployment and stimulate the area's economy. These zones are often used by multinational corporations to set up factories to produce goods (such as clothing or shoes).

In 2002 there were 43 million people working in about 3000 FTZs spanning 116 countries producing clothes, shoes, sneakers, electronics, and toys. The basic objectives of EPZs are to enhance foreign exchange earnings, develop export-oriented industries and to generate employment opportunities.

Sweatshops are generally located in FTZs.

In 2002 there were 43 million people working in about 3000 FTZs spanning 116 countries producing clothes, shoes, sneakers, electronics, and toys. The basic objectives of EPZs are to enhance foreign exchange earnings, develop export-oriented industries and to generate employment opportunities.

Sweatshops are generally located in FTZs.

Corruption in FTZsCorruption in FTZs The creation of special free-trade zones is criticized as giving

business which set up operations undue influence of already corrupt governments, and as giving foreign corporations more economic liberty than is given ordinary citizens in most third-world nations.

The creation of special free-trade zones is criticized as giving business which set up operations undue influence of already corrupt governments, and as giving foreign corporations more economic liberty than is given ordinary citizens in most third-world nations.

FTZ FTZ

Often the government pays part of the initial cost of

factory setup, loosens environmental protections

and rules regarding negligence and the treatment of

workers, and promises not to ask payment of taxes

for the next few years. When the taxation-free years

are over the corporation which set up the factory

without fully assuming its costs is often able to set

up operations elsewhere for less expense than the

taxes to be paid, giving it leverage to take the host

government to the bargaining table with more

demands in order for it to continue operations in the

country.

Often the government pays part of the initial cost of

factory setup, loosens environmental protections

and rules regarding negligence and the treatment of

workers, and promises not to ask payment of taxes

for the next few years. When the taxation-free years

are over the corporation which set up the factory

without fully assuming its costs is often able to set

up operations elsewhere for less expense than the

taxes to be paid, giving it leverage to take the host

government to the bargaining table with more

demands in order for it to continue operations in the

country.

Converse and Child LabourConverse and Child Labour

Jobs making clothes and shoes have dramatically shifted to the poorest countries in the world in the last 25 years. The majority of jobs in such industries in these countries are performed by children.

Jobs making clothes and shoes have dramatically shifted to the poorest countries in the world in the last 25 years. The majority of jobs in such industries in these countries are performed by children.

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From http://www.monitor.net/monitor/sweatshop/ss-global.html

Global EmploymentGlobal Employment

In the past, companies created work for the communities they developed in. This is no longer the case. Many countries in Europe have lost half the jobs in these areas; in the United States alone, about one million shoe and clothing jobs have disappeared since 1980.

In the past, companies created work for the communities they developed in. This is no longer the case. Many countries in Europe have lost half the jobs in these areas; in the United States alone, about one million shoe and clothing jobs have disappeared since 1980.

The reason is simple: slavery wages. A German shoe maker earned an average of $18.40 per hour, compared with $1.70 for a Mexican worker. In today's global economy, both workers compete for the same job. Guess who gets the work.

The reason is simple: slavery wages. A German shoe maker earned an average of $18.40 per hour, compared with $1.70 for a Mexican worker. In today's global economy, both workers compete for the same job. Guess who gets the work.

From http://www.monitor.net/monitor/sweatshop/ss-global.html

Where are you calling from?Where are you calling from?

(Another example of such globalization of work can be

found in call centres (The Guardian, London, U.K., 9 March

2001). Companies such as British Airways and Debenhams

have relocated much of their call centre work to India,

where wages are a fifth of the UK level. The workers are

given crash courses in British culture, everything from soaps

to football, so they can chat knowledgeably with the callers,

who don't suspect that they are speaking to someone in

Delhi or Bombay.)

(Another example of such globalization of work can be

found in call centres (The Guardian, London, U.K., 9 March

2001). Companies such as British Airways and Debenhams

have relocated much of their call centre work to India,

where wages are a fifth of the UK level. The workers are

given crash courses in British culture, everything from soaps

to football, so they can chat knowledgeably with the callers,

who don't suspect that they are speaking to someone in

Delhi or Bombay.)

The Dark Side of a Global WorldThe Dark Side of a Global World

Sweatshops in the largest free-trade zone in the Philippines, have rules against talking and smiling. There is forced overtime, but no job security - it's "no work, no pay" when the orders don't come in. Toilets are padlocked except during two 15-minute breaks per day - seamstresses sewing clothes for western high-street chains allegedly have to urinate in plastic bags under their machines.

Sweatshops in the largest free-trade zone in the Philippines, have rules against talking and smiling. There is forced overtime, but no job security - it's "no work, no pay" when the orders don't come in. Toilets are padlocked except during two 15-minute breaks per day - seamstresses sewing clothes for western high-street chains allegedly have to urinate in plastic bags under their machines.

From http://books.guardian.co.uk/departments/politicsphilosophyandsociety/story/0,,371869,00.html

The Dark Side of a Global WorldThe Dark Side of a Global World

Women like Carmelita Alonzo,

who sewed clothes for the Gap

and Liz Claiborne, had a two-hour

commute home, and died after

being denied time off for

pneumonia, a common illness in

these factories. If the big brands

have so much power and influence

why do they not also have the

power to demand and enforce

ethical labour standards from such

suppliers?

Women like Carmelita Alonzo,

who sewed clothes for the Gap

and Liz Claiborne, had a two-hour

commute home, and died after

being denied time off for

pneumonia, a common illness in

these factories. If the big brands

have so much power and influence

why do they not also have the

power to demand and enforce

ethical labour standards from such

suppliers?

The Bright Side of GlobalisationThe Bright Side of Globalisation

Globalisation not only allows corporations to move their business practices overseas, it also allows for the spread of ideas that can work to

resist such practices.

For example, a number of anti-sweatshop movements have sprung

up in recent years, first as local efforts but soon spreading globally.

Globalisation not only allows corporations to move their business practices overseas, it also allows for the spread of ideas that can work to

resist such practices.

For example, a number of anti-sweatshop movements have sprung

up in recent years, first as local efforts but soon spreading globally.

The Anti-ConverseThe Anti-ConverseA number of movements encourage

consumers to boycott companies who use sweatshop labour. One aims to

offer an alternative for people who no longer wish to support Converse,

given their new business practices.

A number of movements encourage consumers to boycott companies who

use sweatshop labour. One aims to offer an alternative for people who no

longer wish to support Converse, given their new business practices.

QuestionsQuestions

What is a Free Trade Zone? Why would a country want to cut taxes and

benefits for their workers to attract foreign business?

What effect would Converse’s bankruptcy have had on American Workers?

Should the activities of MNCs be regulated? Who should have the responsibility?

What is a Free Trade Zone? Why would a country want to cut taxes and

benefits for their workers to attract foreign business?

What effect would Converse’s bankruptcy have had on American Workers?

Should the activities of MNCs be regulated? Who should have the responsibility?