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?
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?
- 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
- 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