1) Foreign takeovers of Canadian-owned businesses continue to happen. One of the
biggest foreign takeovers in Canadian history a number of years ago, triggered a great
concern among many Canadian observers that there is a “hollowing out” of corporate
Canada. That takeover was by Rio Tinto, a mining company from Britain, that completed
a $38-billion (U.S.) deal to buy the 105-year-old Canadian aluminum maker Alcan Inc.
(headquartered in Montreal). The deal made Alcan a subsidiary of Rio Tinto – a global
company headquartered in Britain (and Australia). Some critics have suggested that the
loss of control of Alcan was very bad for Canada. Those opposed to these foreign
takeovers argue that Canadian business is losing control and independence to foreign
countries. Consequently, there has been concern that the Canadian government should try
to curtail this foreign takeover trend before Canadian is transformed completely into a
“branch plant economy”.
Identify the three central elements of globalization and describe how this case reflects
each of these three elements? Students need to begin with a definition of globalization .
Answer:
1. Globalization can be considered a process that is expanding the degree and forms
of cross border transactions among people, assets, goods and services.
2. Rio Tinto is a Britain/Australian company doing business across border in Canada
3. Globalization refers to the growth of direct foreign investment in regions across
the world.
4. Buying out Canadian owned Alcan, continuing to operate in Canada and is now
expanding into China and India represents direct foreign investment.
5. Shift toward increasing economic interdependence: the process of generating one,
single, world economic system or a global system.
6. The purchase of Alcan by Rio Tinto is an erosion of Canadian independence. The
case also mentions the Hudson Bay and other companies that have been bought
out by none Canadian firms making the Canadian economy more interdependent.
2) Foreign takeovers of Canadian-owned businesses continue to happen. One of the
biggest foreign takeovers in Canadian history a number of years ago, triggered a great
concern among many Canadian observers that there is a “hollowing out” of corporate
Canada. That takeover was by Rio Tinto, a mining company from Britain, that completed
a $38-billion (U.S.) deal to buy the 105-year-old Canadian aluminum maker Alcan Inc.
(headquartered in Montreal). The deal made Alcan a subsidiary of Rio Tinto – a global
company headquartered in Britain (and Australia). Some critics have suggested that the
Test Bank for Karakowsky and Guriel, The Context of Business, 1e
Copyright © 2015 Pearson Canada Inc. 1
biggest foreign takeovers in Canadian history a number of years ago, triggered a great
concern among many Canadian observers that there is a “hollowing out” of corporate
Canada. That takeover was by Rio Tinto, a mining company from Britain, that completed
a $38-billion (U.S.) deal to buy the 105-year-old Canadian aluminum maker Alcan Inc.
(headquartered in Montreal). The deal made Alcan a subsidiary of Rio Tinto – a global
company headquartered in Britain (and Australia). Some critics have suggested that the
loss of control of Alcan was very bad for Canada. Those opposed to these foreign
takeovers argue that Canadian business is losing control and independence to foreign
countries. Consequently, there has been concern that the Canadian government should try
to curtail this foreign takeover trend before Canadian is transformed completely into a
“branch plant economy”.
Identify the three central elements of globalization and describe how this case reflects
each of these three elements? Students need to begin with a definition of globalization .
Answer:
1. Globalization can be considered a process that is expanding the degree and forms
of cross border transactions among people, assets, goods and services.
2. Rio Tinto is a Britain/Australian company doing business across border in Canada
3. Globalization refers to the growth of direct foreign investment in regions across
the world.
4. Buying out Canadian owned Alcan, continuing to operate in Canada and is now
expanding into China and India represents direct foreign investment.
5. Shift toward increasing economic interdependence: the process of generating one,
single, world economic system or a global system.
6. The purchase of Alcan by Rio Tinto is an erosion of Canadian independence. The
case also mentions the Hudson Bay and other companies that have been bought
out by none Canadian firms making the Canadian economy more interdependent.
2) Foreign takeovers of Canadian-owned businesses continue to happen. One of the
biggest foreign takeovers in Canadian history a number of years ago, triggered a great
concern among many Canadian observers that there is a “hollowing out” of corporate
Canada. That takeover was by Rio Tinto, a mining company from Britain, that completed
a $38-billion (U.S.) deal to buy the 105-year-old Canadian aluminum maker Alcan Inc.
(headquartered in Montreal). The deal made Alcan a subsidiary of Rio Tinto – a global
company headquartered in Britain (and Australia). Some critics have suggested that the
Test Bank for Karakowsky and Guriel, The Context of Business, 1e
Copyright © 2015 Pearson Canada Inc. 1
