21 Oct 2009

Sample Essay: Sector Matrix Vs. Product/Commodity Chains

Introduction

The rapid expansion of international trade from mid twentieth century has fundamentally brought on board the advantages of inter-business relationships when predicting the regional outcomes of market activities, this involvement has become somewhat huge. The need for reliance among organizations during various industrial processes such as manufacturing and distribution has led to the emergence of a comprehensive and concrete structure that defines their interrelations, though not definite in any sense, it almost resembles the structures governing the corporate themselves. Recently, much attention has been directed towards the study of such structures and how effective they are in understanding of product markets concept.  For instance, China is by far the largest manufacturing and consuming economy of both local and foreign commodities, consequently the Chinese government has given special importance on strategic instruments as a way of reducing environmental impacts of both the local and global economic activity. The commodity chains analysis has helped countries like China in creating a system of activities that are structured to study and analyze the environmental impacts and the importance of sharing responsibilities with other trading partners in the event of commodity marketing. (Gereffi,G. 1994).

This paper seeks to analyze the methodologies applied in an attempt to understand product markets, the challenges of the methods applied and the reason why sector matrix is increasingly providing an alternative to the study of related projects. The sector matrix provides a wide variety of economic analysis that is relatively easy to examine because it is able to compare national sources and provides huge data that can be compared against one another. Sector matrix also provides the single most comprehensive source data available. In view of this it is imperative to analyze the fundamentals of products markets and the reason for its diminishing preference.

Commodity Chain Analysis

The rationale behind commodity chain analysis is to determine the social and environmental impacts of production and supply chain activities of various commodities with the aim of facilitating and establishing a long term management of commodity chains not only locally but also globally. The commodity chain concept uses the approach of sustainability impacts which provides an approach that is fundamental in its own unique sense.

In the global arena, Global commodity chain analysis is based on the impacts of politics on the economy and how political affiliations determine and direct market outcomes. The study of commodity chains tends to study and explain how production is organized, and how trade and consumption has been globalized in the world economy. Viewing the product chain in this approach makes it rather easy because it is seen as a combination of processes whose main goal is arriving at the finished product.  The concept directs its attention towards the socio-economic relations between nations, which rely on the characterization of commodity chain as being either producer oriented or buyer oriented. It mostly includes the analysis of four basic elements of the chain which include the input-output structure which follows commodities as they move along the chain until they become finished products, the specific geographical locations where the various processes occur, the political and social relations that govern the operation of supply along the chain, and the various institutions outside the commodity chain that exerts influence on the action taken along the supply chain for instance government policy. Gereffi,G. 1994).

The structure of commodity chains analysis gives a lot of information concerning the global structure of production and the global economy. As a result it represents a fairly credible source for the stakeholders involved in production and distribution of commodities both locally and globally. The processes involved in commodity marketing are very complex and involves factors like the origin of the commodity consumed by the market, the various stages involved in the refining of raw materials and the final destination of the commodities. As Jean- Paul Rodrigue(2009) puts it, the commodity chain analysis includes a sequence of processes ranging from extraction of raw materials, the assembly of intermediate products to the distribution to the final consumer market. ( Jean-Paul, Commodity Chain Analysis. 2009).

Jean-Paul divides the complex processes involved in several perspectives, looking at this helps in understanding where the weaknesses of commodity chain emanates from. The levels include:

Transactional perspective: this area looks into how the management of commodity chains and it involves the processes of decision making and the management of transactions.

Comparative perspective: analyses the quality of the elements of commodity chains and how value that is added at each stage determines the competitiveness of the commodity.

Functional perspective: looks into the physical processes that commodities undergo during their distribution which includes capacity constrains in distribution which include: modal, intermodal and terminal effectiveness.

Looking at Jean-Paul’s analysis reveals that this type of analysis is only able to view at the distribution of commodities from a single perspective at a time. For instance the above analysis only centers on transportation and cannot divert and look into other areas such as political interrelations between nations, geographical or environmental factors. Commodity chain does not provide for a way to interlink the above aspects at a given time.

Limitations of commodity chain analysis become more apparent at the global level where the processes become more complex. The GCCA (Global Commodity Chain Analysis) has always been specifically directed towards providing a critical assessment in commodity chain and has therefore provided comfort. However, the fundamental requirement of a clear and comprehensive quantitative data on the trade flows and the environmental impacts of specific practices along the supply chain, creates limitations for the GCCA because it is a major pre-requisite for issues like effective environmental management. (Von Moltke, Konrad and Onno Kuik 1998).

The GCCA’s concentration on the social and economic relationships along supply chains provides a critical basis for the development of strategic market-based and regulatory policy by allowing targeted application of policy to the commodity chain context. The most important challenge facing thorough appliance of GCCA is that many of its most important concepts, such as the role of politics in product marketing cannot be effectively quantified. As a result most assessments tend to be qualitative, making consistency and comparability difficult to ensure.

The Ecological Footprint which was developed in Canada by Mathis Wackernagel and Willam Rees during the 1990s also provides a methodology for determining the environmental impact of economic activity as a function of geographic area. The basis of the footprint approach is established on the idea that it is able to provide a comparison between the resource demand of a particular area or population with the corresponding resource availability. In essence, the footprint involves translating of resource utilization into a quantitative estimate of the land area required to supply such resources.

The automobile industry provides a good example of a producer-driven chain, with several production systems that entail thousands of firms including parents, subsidiaries, and subcontractors.   All of these systems are too complex to be sufficiently analyzed using commodity chains. In an example provided by Gerrefi( 1999), the Japanese automobile industry had an average of 170 first-tier, 4,700 second tier and 31,600 third tier in the 1980s (Hill 1989). Florida and Kennedy (1991) established that this Japanese auto industry reorganized many of their country’s supply networks in North America. Furthermore, Doner (1991) went on to explain that this reorganization was extended to nations in the East and South East Asia. In view of the producer driven commodity chains have been to some extent successful in establishing a division of labor in East Asia through its study of internationalization of the US.

The Sector Matrix Analysis

Every scientific system of analysis usually has limits. The commodity chain system of analysis is not out rightly wrong, but the limitations it offers have given way to the sector matrix analysis. For instance chain analysis only works well for simple consumable goods like foodstuffs which require complex structures during their distribution, but need no additional infrastructure or services once they have been distributed. However, for complex products like pharmaceuticals which require complex infrastructures in form of healthcare and vehicles which require motoring and consumes a large proportion of domestic expenditure, the use of commodity chain analysis is rather myopic. This argument does not confine the applications of sector matrix to a few complex commodities, because its applications has widened due to the accompaniment of many commodities nowadays with services.

In their Book, “Breaking the Chains? A sector Matrix for motoring, Julie, F., Colin, H., Sukhadev, J. and Karel,W. provide an alternative to commodity chains in form of sector matrix by looking at the limitations of commodity chains in the motor industry. They argue that Gerrefi’s( 1996) views supply in simplified linear terms while assuming that demand is the reverse relations with product distribution chain. This alternative method is viewed in terms of activities such as motoring or healthcare where products such as cars and ethical drugs are consumed together with a lot of other services depending on consumer preferences and require a variety of other infrastructure. Julie, F et al base their general argument on a demonstration of the advantages of the Sector Matrix analysis of the motoring industry and the commodity chain consideration of the same industry as a car industry. They first argue that that the word industry has been previously used out of context by looking at it from commodity chain point of view. They provide an example for instance, where it is difficult to categorize a company that manufactures rear window for cars as being a separate industry altogether or a sub-industry within the motor industry. The Sector matrix provides a definition which effectively accommodates the two; an industry is a group of products associated by a common technology or supply or distribution channels.(Julie, F.  et al 1998)

Looking at China which is home to the third most huge connector region globally where the total connector sales totaled about $7.022 billion in connector sales in the financial year of 2007 it is easy to reveal the complexity of market processes and as a result the limitations of commodity chain in such a huge market. The manufacturers involved in the Chinese connection market are about 60 with 40 of them being major manufacturers. The processes involved these kinds of market are not only complex but also huge. Therefore viewing them in a linear fashion will not only take a lot of time but would create room for numerous errors. (Electronicas.Ca. Conducting a Market analysis).

The sector matrix analysis is governed by demand from firms and household outside the sectors which enables an organization to gather enough profits to be able to sustain its employees and allow for cost recovery. These surpluses can then be injected to other sectors of firms which operate at both the national and international level. Following the logic concept of viewing at only the commodities, not only at the substitutable finished products but also the complementary products that go along with the finished products which form part of what is required by the consumers will direct the view to a much broader sense of commodities and services. The result would not be commodity chain but a vertical and horizontal matrix. In the motor industry, this fact will shift the concentration to viewing the marketing of vehicles in terms of motoring. The relations on the side of the consumer will depend on the patterns of income as well as the subsequent distribution of demand.

In the motor industry supply interactions arises from the re introduction of nearly new second hand cars which are being sold at a discount with a first owner who will hold for less than two or three years which is normally the period for private owners, this scenario clearly presents itself in the UK motor industry. Traditionally, car firms sold cars at a discount to their own workforce and passed demonstration models to dealers. New cars are alike in the sense that expenses never end on purchase but goes on in form of expenses. (Julie, F.  et al 1998)

Conclusion

The sector analysis provides an efficient and complex analysis of commodities which is able to put together both complementary and competing goods and services. The sector matrix rather than providing an alternative to the commodity chain analysis provides for methodologies that complement the limitations of commodity chain analysis.

References

Barnet, J. & Müller, E. (1974). Global reach: The power of the multinational corporations. New York: Simon and Schuster.

Cardoso, F. H., and Faletto, E. (1979). Dependency and development in Latin America. Berkeley, CA: University of California Press.

Dicken, P. (1998). Global shift: Transforming the world economy, 3rd edition. New York: Guilford Press.

Doner, R. F. (1991). The Industrialization of the Automobile firms in Japan and Southeast Asia. Berkeley, CA: University of California Press.

Evans, P. B. (1979). Dependent development: The alliance of multinational, state, and local capital in Brazil. Princeton, NJ: Princeton University Press.

Florida, R. & Kenney, M. (1991). Transplanted organizations: The transfer of Japanese industrial organization to the United States. American Sociological Review 56, 3: 381-398.

Frank, A. G. (1967). Capitalism and underdevelopment in Latin America: Product marketing York: Monthly Review Press.

Fröbel, F., Heinrichs, J., and Kreye, O.  (1981).  The New International Division of Labor.  New York: Cambridge University Press.

Gereffi, G. (1994). ‘The Organization of Buyer-Driven Global Commodity Chains: How US Retailers Shape Overseas Production Networks.’ In G. Gereffi and M. Korzeniewicz (eds.), Commodity Chains and Global Capitalism. Westport: Greenwood Press.

Gibbon, P (2000). Global Commodity Chains and Economic Upgrading in Less Developed Countries Centre for Development Research, Copenhagen.

Jean-Paul, (2009) Commodity Chain Analysis.: processes involved  in commodity distribution.

Julie, F.  et al (1998). Breaking the Chains? A Sector Matrix for Motoring, Vol 3. Overseas Publishers Association. 1998.

Raikes, Phillip; Michael Friss Jensen, Stefano Ponte (2000). Global Commodity Chain Analysis and the French Filiere Approach: Comparison and Critique, Centre for Development Studies, Copenhagen.

Von Moltke, Konrad and Onno Kuik (1998). Global Product Chains and the Environment, Institute for Environment Studies, Amsterdam.

Von Moltke, Konrad and Onno Kuik (1998). Global Product Chains and the Environment, Institute for Environment Studies, Amsterdam.

www.elctronica.ca. . Electronicas.Ca. Conducting a Market analysis. Visited on 24th March, 2009.

05 Sep 2009

Sample Essay: Tanabata Festival:A Love Story of the Stars

For thousands of years, people have associated objects in the sky with the gods and goddesses of their cultures. The Greeks, Romans, Egyptians, Sumerians, Maoris, Hindus, North American Navajo and Pawnee Indians, and the Mesoamerican Mayans and Aztecs are just some of the cultures that have associated their fables, folklore and festivals with the heavens and the stars. The Japanese are no exception and likewise celebrate Tanabata, ,meaning “Evening of the Seventh”, which is a Japanese star festival. It celebrates the meeting of Orihime (the star Vega) and Hikoboshi (the star Altair), lovers separated by the Milky Way, a river made from stars that crosses the sky, and allowed to meet only once a year on the seventh day of the seventh lunar month of the lunisolar calendar. The Tanabata festival is a traditional celebration held as a tribute to love and is held in the evening since the stars come out only at night.

The Tanabata festival actually originated from the Chinese star festival Qi Xi which was celebrated in China. Although there have been several variations to the story, basically it recounts the love story of Orihime,, daughter of Tenkou the Sky King, who wove beautiful cloth by the bank of Amanogawa, the River of Heaven. Orihime knew that her father loved the cloth so she worked very hard every day to weave it. But she was sad because she felt could never meet and fall in love with anyone because of her hard work. Seeing his daughter’s sadness, Tenkou arranged a meeting with Hikoboshi, a cow herder who lived and worked on the other side of the Amanogawa. Orihime and Hikoboshi fell instantly in love with each other and were shortly married. However, after marriage, Orihime no longer weaved cloth for Tenkou and Hikoboshi’s cows strayed all over Heaven. This angered Tenkou, prompting him to separate the two lovers across the Amanogawa. Orihime became very sad and begged her father to let her be with her husband again. Moved by his daughter’s tears, Tenkou finally allowed the two to meet on the 7th day of the 7th month but only if Orihime returned to her weaving. However, the first time they tried to meet, they could not cross the river because there was no bridge. Orihime cried so much that a flock of celestial magpies came and promised to make a bridge with their wings so that she could cross the river and the two lovers could renew their pledge of love.

Large-scale Tanabata festivals are held in many places in Japan, the most famous of which is held in Sendai from August 5 to August 8. In the Kanto area, the biggest Tanabata festival is celebrated in Hiratsuka, Kanagawa for a few days around July 7. Large colorful streamers and sasa-kazari, or bamboo-decoration, can be seen all around. People decorate branches of a cut bamboo with strips of paper, called tanzaku, on which they write poems or proverbs, and colored threads likewise adorn the bamboo branches. People chant a traditional song (also called “Tanabata”) and summer vegetables such as eggplant and cucumbers are prepared as dishes during the festival.

During the late-evening hours, one can see what is called the “Summer Triangle”, a remarkable star pattern of the summer sky consisting of three bright stars from three constellations. The brightest of the three is Vega in the constellation of Lyra. Next is Altair in Aquila, and third is Deneb in Cygnus. One will also notice a great black rift dividing the Milky Way into two streams, beginning with Cygnus and extending down toward the south. In reality, many stories, myths and legends have been told about the Milky Way in many different cultures, but the love story of Orihime and Hikoboshi still remains the most poignant one of all.

Works Cited

Doorstep Astronomy – See the Summer Triange. 6 July 2007. Space.com. 4 May 2008 <http://www.space.com/spacewatch/070706_ns_summer_triangle.html>.

Orihime, Kengyuu, and Tanabata: Adapting Chinese Lore to Native Beliefs and Purposes. 2007. Mythic Passages the Magazine of Imagination. 4 May 2008 <http://www.mythicjourneys.org/newsletter_jul07_renshaw.html>.

Tanabata. 3 May 2008. Wikipedia the Free Encyclopedia. 4 May 2008 <http://en.wikipedia.org/wiki/Tanabata>.

Tanabata (Star Festival) – July 7. 5 March 2002. Massachusetts Institute of Technology. 4 May 2008 <http://web.mit.edu/jpnet/holidays/Jul/tanabata.shtml>.

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25 Jul 2009

Sample Essay: Anthropology

Kathryn Marie Dudley in The End of the Line–lost jobs, New Lives in Postindustrial America depicts in graphic details the sense of tragedy when a worker loses a job, and the devastation that comes when a factory employing thousands of workers closes down. “When the closing of a local machine tool factory forced my grand father into early retirement, I saw in his loneliness why the loss of an industrial job can be so devastating”(Dudley.xi). Kenosha autoworkers have undergone a similar tragedy, when Chrysler stopped building cars in Kenosha. Kenosha witnessed a dramatic transformation from early 1900 onwards, and claimed 7.2 percent of domestic car market, especially after American Car Corporation (AMC) came into existence. During 1960, Kenosha became the largest hub of employment in Wisconsin with almost 15,000 labor force constituting 40 percent of the city’s labor force. The working class transformed into blue collar workers. They had aspirations, hopes and dreams. They believed in work ethic of success. They believed in American dream. However, since their displacement and closure of factory their world came to an end. At the macro level, the American society was also changing structurally. Dudley writes, “A growing ethnography of plant closings show us that displaced workers often develop biting critiques of American industry in the aftermath of a shutdown. Yet virtually no attention has been paid to the other side of these cultural conversations: the side that does not mourn the loss of old line-manufacturing and is, in fact glad to see it go” (p.xxiv).

A Aneesh in Virtual Migration: The Programming of Globalization “contrasts the account of embodied migration with the fast growing but little researched virtual migration that doesn’t require workers to move in physical space”(A.Aneesh.1) This is in fact migration without the hassles of body shopping, visa requirements, alien status and every thing else that goes in the discourse on migration. However, the impact of this phenomenon on society and economy need to be investigated, because today we are in the age of programming that defines current mode of capital-labor relationship. Speaking of the concerns of labor unions and other anti-globalists Aneesh writes, “… the concerns are minor revolts against continuous of the social to the economic. Job displacements, endless demands for retraining, perceived job insecurity, and the demand for continuous flexibility by a growing “flexible” economic system have escalated disruptions in the social realm” (p.16).

David Harvey has explored the neo-realist agenda that originated in the eighties when Volcker, Reagan, Thatcher and Deng Xiaoping revived the minority arguments and turned them majoritarian. (p.2). A deeper examination reveals the perspective that defined neo-realism agenda. It was in fact the global capitalism hegemony that was lurking in the background, even as a number of factors catapulted the agenda to the mainstream. “The restructuring of state-forms and of international relations after the Second World War was designed to prevent a return to the catastrophic conditions that had so threatened the capitalist order in the great slump of 1930s. It was also supposed to prevent the re-emergence of inter-state geopolitical rivalries that has led to the war. To ensure domestic peace and tranquility, some sort of class compromise between capital and labour had to be constructed” (p.9-10). This idea is best expressed in an influential text written by eminent social scientists Robert Dahl and Charles Lindblom in 1953 who argued in favor of a right blend of state, market and democratic institutions to guarantee peace, inclusion, well being and stability as according to him both capitalism and communism had failed in their raw form. (p.10)

The neo-realism impact appears neo-capitalism in its latest avatar, only more rigorous than ever before. New forms of labor and the labor markets have been discovered via new technologies that makes physical migration redundant. Cross border trade restrictions and other restrictions too have been made redundant with global trade regime in force. The north and south divide is today even more acute as the world has become unipolar regime after the breakdown of Soviet Union. The USA has mandated a policing role for itself to let the icons of capitalism prosper unhindered.

The capital has accumulated in fewer hands since the 1980s. “Almost certainly, with the Bush administration’s tax reform now taking effect, the concentration of income and wealth in the upper echelons of society is continuing apace because the estate tax (a tax on wealth) is being phased out and taxation on income from investments and capital gains is being diminished, while taxation on wages and salaries is maintained” (p.16-17) We find the same pattern of concentration of wealth and capital in fewer hands. The top one per cent of income earners in Britain has doubled their income from 6.5 percent to 13 percent since 1982. A small and powerful oligarchy arose in Russia after neo-liberal shock therapy was administered to it in 1990s. In China too extraordinary wealth and income disparity has occurred since its liberalization. People like Carlos Slim in Mexico discovered themselves in the fortune list of wealthiest overnight.(p.17)

The new form of global capitalism has culturally and morally displaced as well as impacted hundreds of thousands of workers across the globe, whether it is Kenosha automobile industry or the Silicon Valley. Displacement causes permanent dislocation from place and emotional ties with friends and neighborhood that can only be expressed through wry humor of Kenosha workers. The class concept that defined work sphere has vanished over night. The virtual immigrants, skilled and educated that have taken up routine and repetitive jobs have yet to face the overwhelming challenges of their job structure. It is in fact a new form of mechanization that is taking its toll. The call center industry has perhaps the highest rate of employee turn over. Suicides among these workers are frequent.

The workers in neo-liberal phase of capitalism are torn between a unique ambivalence resulting from uprooted loyalties. The tensions created by global capitalism between national interest and market interest, and between community stability and individual freedom can best be resolved only in the psychological shelters of religious icon. They could also fight out their ennui and alienation through philanthropy, flexible citizenship or any other means that strengthens their self worth.

Conclusion: Capitalism has since beginning depended for its existence on labor. Migrants and slaves came in large number to work in plantations. The process has continued since then. Functionalists celebrated the rise of blue collar workers in 1950s but the process was mediated by joblessness, cultural loss and uprootment. With changes in society and newer forms of technology the structure of work has changed but the capitalist paradigm based on neo-liberal approaches to society and economy remains rooted in profit ideology enabled by a global apparatus and refined modes of production. Transnational trade and capital regime has led to transnational workers, virtual workers and workers with flexible citizenship even as the relations of production has brought about greater disparity, and greater alienation  without the class consciousness.

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