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The term globalization refers an evaluation from local market to international market (Croucher,S., 2003 cited in Stuart,W., et al.,2010 ). Hill, (2005) as cited in Stuart, et al (2010), mentioned most country would shift toward a more integrated and interdependent world economy by the merging of historically and separated national markets into one huge global market place. Black,(2000) as cited in Stuart,et al.( 2010) agreed that the affection of globalization has shape the whole world market become a single market which means those on goods and services ,capital and labour are available trading on worldwide basis. Therefore, they believe that people can able get information and the result of research flow readily between countries. The impact of globalization has bring success of business to new level, where many countries have been go through it(EconomyWatch.,nd).
What is real impact to country?
The globalization has sharp a new form of country structure though the economic , technological ,sociocultural and political (Croucher,2003)[own textbook] It has happen so fast and unexpected ,because it has shrinking the space and time that people can access to anyway and at anytime whereby not having the distances problem. [ot]Thus, globalization could be superior grow that main driver key is there exiting many preference and the need of consumers from the worldwide (Pierre,D., 2006). He has mentioned customers can able purchase on goods and services with nowadays high technology and tool communication such as Amazon, ebay and others.
In research based on Economy Watch team that found the globalization has bring forward on each industry and meanwhile it has destroy some of industry where its cannot survival though the impact of globalization. Their research have shown the financial industry could gain more benefit after the emergence of financial markets on global rather than local market, and be more efficient entrance the finance facility at other countries. With the free trade principle exercises on worldwide, it has result in boost up the finance flow. Economy of country will also increase whereas gain more business trade and investment from foreign investments, which has mentioned by Adam Smith,?? as cited in Ferraro (1998).
According to Kose,et al.,2007 have done the research on relationship between emerging market with financial openness that influence the economic country. Their result of research has shown the group of developing countries take part better than those countries have not join it and shown in Chart 1. Unfortunately, their result was incomplete, because they faced some difficult of determine financial openness. Chart 1. Against the odds
Their research found that other directly factor influence financial industrial such as as sudden stops of capital inflows, current account reversals and banking crises[ps:haven't edit]. They argued that financial globalization is not totally benefit for developing countries as examples as enhanced international risk division, and reduced instability of consumption.
What are advantage and disadvantage of globalization?
In generally , globalization has give advantage to company such as opportunity of develop new market for consumers have more variance choose the best quality product. It also provides educated understanding between different nationalities(bangkoklogistics,n.d.). Besides, companies can outsourcing their part of project that reduce time, uncertain factors and fail product. They can find more profit base on manufacturing rather than charge high price on consumer. Thus, they offer reasonably price for attach different type of consumer with good quality. Government has encouraging MNE invest directly on country that reduces unemployment by new investment and industrial ventures.(bangkoklogistics,n.d.)
Disadvantage of globalisation
Generally, for domestic supplies have to compete with international suppliers that lose the competitive advantage even fight with price. Thus, there would a lot of stress and threat of new type of colonization comes with much power and money from foreign player. Meanwhile, with the outsourcing concept, there would be increase jobless that is working middle class in developed country such as U.S(bangkoklogistics,n.d.).
Among many companies have success in financial industrial though globalization, one of company can be more precise explain how reaction on impact of globalization and create new solution at nowadays which is Hong Kong and Shangai Banking Corporate holding plc(HSBC holding plc).
Summary of why their company focus on globalization.
the benefit of emerging market for financial industry= HSBC able invest different country and ??? [check first]
Recent year the whole worlds have financial crises that directly impact to MNE and so do HSBC.
Background of HSBC
Thomas Sutherland was founder the HSBC while he was working in the Peninsular and Oriental Steam Navigation Company[history]. He found that financial service management has huge demand in Hong Kong and China so that he has established the HSBC in March 1865 at Hong Kong and Shangai. Chuan Li (n.d) stated that the World Bank operate the finance on worldwide but their goods and services were not satisfied and inefficiency to local market need. Whereas, the World Bank unable afforded heavy debt and lead to a harsh economic imbalances.
By this lesson, Thomas had adopted the joint venture concept to operate business at different location(annual report). Thus, HSBC can reduce the uncertain from internal and begin a good relationship at local citizen and government.
Management of HSBC
HSBC used the ethnocentric approach that easy communication between parent and subsidiary company at early stage. After subsidiary company has stability, then management structured can applied the polycentric method that efficiently and at short term to fit in the cultural and political of that country. With these approaches, HSBC has good start the step in their vision, which is the world local bank. It reminds people who want due to finance related with international and local that HSBC will be their first optional.
History and development
Companies has been purchased
HSBC established in HK and shangai
HSBC Bank middle East limited
The mercantile bank of India limited and The British Bank of the Middle East
Hang Seng Bank is the fourth largest listed bank in Hong Kong by market capitalisation.
Hang Seng Bank Limited(62.14 per cent)
HSBC USA, Inc
Marine Midland Banks, Inc.,( 51 per cent interest)
HSBC Bank Canada
HSBC incorporates its then existing Canadian operations
HSBC Bank plc, one of the UK's principal clearing banks
Midland Bank plc(14.9 per cent interest)
HSBC Holdings plc is established as the parent company of the HSBC Group
HSBC purchases the remaining interest in Midland Bank plc
As a consequence of the Midland acquisition, HSBC's Head Office is transferred from Hong Kong to London in January
HSBC Bank Brazil
HSBC Bank Argentina S.A[
HSBC assumes selected assets, liabilities and subsidiaries of Banco Bamerindus do Brasil
S.A following the intervention of the Central Bank of Brazil
in Argentina completes the acquisition of Group Roberts
HSBC acquires Republic New York Corporation, subsequently merged with HSBC USA, Inc., and Safra Republic Holdings S.A.
HSBC completes its acquisition of 99.99 per cent of the issued share capital of Crédit Commercial de France S.A., now HSBC France.
HSBC acquires 99.59 per cent of Grupo Financiero Bital, S.A. de C.V.,
HSBC acquires Household International, Inc., now HSBC Finance Corporation.
HSBC acquires Banco Lloyds TSB S.A
Banco Múltiplo in Brazil and the country's leading consumer finance company, Losango Promotora de Vendas Limitada
The acquisition of The Bank of Bermuda Limited is completed
HSBC acquires Marks and Spencer Retail Financial Services Holdings Limited, which trades as Marks and Spencer Money ('M&S Money') in the UK.
HSBC acquires 19.9 per cent of Bank of Communications, and Hang Seng Bank acquires 15.98 per cent of Industrial Bank.
HSBC increases its holding in Ping An Insurance to 19.9 per cent, having made its initial investment in 2002. Ping An Insurance is the second-largest life insurer and the third largest property and casualty insurer in mainland China.
HSBC Finance completes the acquisition of Metris Companies Inc making HSBC the fifth-largest issuer of MasterCard and Visa cards in the USA.
HSBC acquires Grupo Banistmo S.A. ('Banistmo'), the leading banking group in Central America, through a tender offer to acquire 99.98 per cent of the outstanding shares of Banistmo.
Grupo Banistmo S.A. ('Banistmo'),
HSBC's three associates in mainland China, Industrial Bank, Ping An Insurance and Bank of Communications, issue new shares. HSBC does not subscribe and, as a result, its interests in the associates' equity decrease from 15.98 per cent to 12.78 per cent, from 19.90 per cent to 16.78 per cent and from 19.90 per cent to 18.60 per cent, respectively. Subsequently, HSBC increases its holding in Bank of Communications from 18.60 per cent to 19.01 per cent.
HSBC is named the successful bidder in a government auction to acquire the assets, liabilities and operations of The Chinese Bank in Taiwan.
HSBC completes the sale of its seven French regional banks.
In May, HSBC completes the acquisition of 88.89 per cent of PT Bank Ekonomi Raharja Tbk in Indonesia for US$608 million in cash and, in August, increases its holding to 98.96 per cent at a total cost of US$680 million.
Source : annual report of HSBC 2009.[ps: haven't change it]
The last info of HSBC including production.2009
According to daily finance, HSBC faces the latest of competitors, which are Barclays plc, Citigroup Inc, Royal Bank of Soctland group plc. Table 1 showed the direct competitors influence toward HSBC .
Royal bank of scotland group plc
Operating margin (ttm)
*Currency money in USD
Source: http://finance.yahoo.com/q/co?s=HBC [had editied ,ps check pattern]