globalisation Flashcards
(17 cards)
Q: What is globalisation?
The growing integration and interdependence of national economies.
Q: Name four characteristics of globalisation.
1) Increased international trade
2) Growth of multinational corporations (MNCs)
3) Increased movement of labour and capital
4) Greater cultural and economic interdependence
What are the main factors contributing to globalisation?
Trade liberalisation
Improved technology and communication
Containerisation
Growth of MNCs
Development of global financial systems
Government support for free trade
What is a multinational corporation (MNC)?
A business with operations in more than one country
Give two potential benefits of globalisation to businesses.
Access to larger markets
Lower production costs through offshoring
Give two drawbacks of globalisation for businesses.
Greater competition from foreign firms
Vulnerability to global economic shocks
What is offshoring?
Relocating business processes or production to another country to reduce costs.
What is outsourcing?
Contracting out a business function to an external organisation, often overseas.
What is a global marketing strategy?
A strategy where a business markets the same product in multiple countries with little or no modification.
What is glocalisation?
Adapting global products or services to local markets (think: “global + local”).
What is a trade bloc?
A group of countries that have agreed to reduce or eliminate trade barriers between themselves.
Name two major trade blocs.
European Union (EU)
NAFTA/USMCA (North American Free Trade Agreement)
What are the benefits of trade blocs for businesses?
Access to larger markets
Economies of scale
Reduced tariffs within the bloc
What are the drawbacks of trade blocs for businesses?
Increased competition
Compliance with regulations of the bloc
External tariffs on non-member trade
How does globalisation affect the labour market?
Increases access to skilled labour
Can lead to job losses in high-cost economies
May cause wage suppression in some industries
What ethical issues are associated with globalisation?
Exploitation of workers (e.g. sweatshops)
Environmental degradation
Transfer pricing and tax avoidance by MNCs
