Chapter 7: Globalisation, PESTEL, Index

Question 1

What is globalisation

Answer 1

increasing integration of national economies

(in terms of trade, financial flows, information and tech)

Question 2

What drives globalisation?

Answer 2

1) improvement in communication tech
2) political realignment
3) growth in global industries (MNC)
4) cost differentials
decrease in transport costs and increase in industry costs per country
increases int trade

Question 3

What is the impact of globalisation?

Answer 3

1) Relocation of certain industries
2) Increased competition -> better value for money for consumers
3) new growth markets
4) widen economic divisions
5) cross border mergers and acquisitions (increase in MNC)

Question 4

How do developing countries benefit from globalisation

Answer 4

-gain through foreign direct investment
- trade benefits
-technology transfer

Question 5

What is PESTEL (meaning)?

Answer 5

A framework of macroenvironmental factors to be used in strategic management

Question 6

What does PESTEL acronym mean?

Answer 6

Politics
Economic
Social
Technological
Environmental
Legal

Question 7

What does an index number show?

Answer 7

relative/percentage changes over time

Question 8

What is a base year?

Answer 8

The period that all other periods are refered back to
Base year = 100
the year should have no unusual circs, but often just first year invented

RPI = 1987