Putting Globalization and Concentration in the Agri-food Sector into Context

Current Agriculture, Food & Resource Issues

cycle of start-ups and acquisitions related to new products and new technologies.
However, it must be noted that firms do not necessarily need to be bought or sold in order
for knowledge and capabilities to be transferred.

Global Corporations and Decision Making

One of the implications of global firms for both managers and policy makers is that
decision making in these firms may not occur within national boundaries (Bonnot, Carr
and Reyner, 2000). Vital components of success in dealing with these organizations will
be comprehending the objectives of both local subsidiaries and global parents,
understanding the decision-making process, and developing strategies for influencing that
process.

Implications for Policy and Policy Makers

It used to be the case that nations tried to influence their citizens’ quality of life through
monetary, fiscal and other policies. That approach can no longer work, because of trade
liberalization and all the associated changes to domestic and international policies
(DeLong, 1998). Opponents to globalization and concentration insist that governments
take action to stop these processes. Is stopping them possible or desirable? The answer is
“Yes, and no”. They may be stopped if governments are willing to take legislative action
to prevent such activity and are willing to suffer the economic and political consequences
of reduced economic activity. However, there are relatively few who would argue that
stopping such activity is desirable. Better questions for policy makers to ask relate to the
relative costs and benefits of globalization and concentration, the specific sub-sectors that
will experience the greatest disruptions or opportunities, and the policies that can assist
firms during transition periods.

As with business management, constant environmental scanning will be essential to
successful policy development. That scanning must include analysis of the actions of
corporations and governments. Policy makers must recognize that global firms are
continually evaluating the policies and business environments of the regions in which they
operate. The term “relative advantage” applies to regions as well as companies. That
advantage is the result of resource availability, competition and government policy.
Maintaining an advantage requires policies that promote innovation, entrepreneurship and
cooperation between industry and government. It also requires harmonization of policy
among important trading partners to minimize unnecessary disruptions.

Now the challenge is for the private and public sectors to work in concert to create
policy that attracts the best businesses and industries, both from a private-profit-oriented
perspective and from a public policy perspective.

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