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Flashcards in Globalisation Deck (10):

What is globalisation?

- The shift towards a more integrated and interdependent world economy
- A process rather than a fact, trend or structure
- Freedom is the central issue


What are the components of globalisation?

- Consumption
* Markets
* Production


What is the globalisation of markets?

- Merging of historically distinct and separate national markets into one huge global marketplace
- Most global of markets are not typically markets for consumer products - where national differences in tastes and preferences can still be important enough to stop integration, but rather industrial goods and materials that serve universal needs


What is the globalisation of production?

The sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production


Why do firms engage in international business?

- To expand sales
- To acquire resources
- Lower costs, operating knowledge
- To diversify or reduce risks


What necessitated the emergence of global institutions?

- To help manage, regulate and police the global marketplace
- To promote the establishment of multinational treaties to govern the global business system


What are the growth drivers of international business?

- Technology
- Liberalisation of cross-border trade and resource movements
- Development of services that support international business
- Growing consumer pressures
- Increased global competition
- Changing political situations
- Expanded cross-national cooperation


Changes in what factors describe globalisation?

- Trade of goods/services
- Capital market turnover
- Repatriation
- Number of MNC’s
- Employment, sales, assets of MNC’s


What are the pros of globalisation?

- Promotes global economic growth
- Creates employment
- Increases competitiveness (and innovation) between firms
- Reduces consumer prices
- Increases consumer choices
- Increased information flows and spread of ideas
- Provides less developed countries with access to foreign capital and tech
- Cultural intermingling promotes understanding
- Increase international co-operation on economic, social and environmental issues


What are the cons of globalisation?

- Economics crises are transmitted
- Destroys (manufacturing) jobs in developed countries
- Exploits labour in LDC’s with weak labour/environmental laws
- Causes environemtnal destruction in LDCs with weak environmental protection laws
- Loss of national sovereignty to undemocratic international organisations
- Increases income gap between world’s rich and poor nations
- MNC’s have the ability to exploit tax havens to avoid paying domestic taxes
- MNC’s are increasingly influencing political decisions
- Accelerates the spread of communicable diseases