2.1 How has globalization changed business?

Question 1

What does MNCs stand for?

Answer 1

Multinational corporations

Question 2

What are MNCs?

Answer 2

are enterprises that produce and distribute goods and services in more than one country and often in many countries

Question 3

What are MNCs also referred to?

Answer 3

International corporations

Question 4

Its estimated that MNCs account for more than ______% of the world’s trade?

Answer 4

70

Question 5

How do domestic corporations and MNCs are different?

Answer 5

MNCs are:
1. larger
2. more locations such as retail stores, offices and branches
3. more employees
4. greater profits

Question 6

Generally, each country where an MNC operates has its own __________________ and ___________________

Answer 6

corporate headquarters/executive staff

Question 7

To lure MNCs to set up shop, countries often offer

Answer 7

incentives in the way of government assistance and tax benefits

Question 8

What is horizontal integration?

Answer 8

producing the same product or product line the same in production facilities located in countries where the product is sold.

Question 9

What is a vertical integration?

Answer 9

facilities producing different parts used in the production process. The outputs of the same production facilities are the inputs to other production facilities.

Question 10

How are the advantages for import opportunities?

Answer 10

• importing from other counties with lower costs
• more profit
• global marketplace has become competitive which effects labor force.

Question 11

What happens when there is a competition from foreign players?

Answer 11

Companies are forced to cut jobs

Question 12

How did globalization effect labor costs?

Answer 12

Countries with lower costs and lower standards of living provide less expensive products because of the lower labor costs.

Question 13

In summary, downsizing (when a business cuts jobs as a cost-saving remedy) in Canadian businesses occurs for two key reasons related to globalization:

Answer 13

• reduced demand for domestic products and services
• outsourcing of labor

Question 14

How did globalization effect information technology?

Answer 14

It advanced it, and change how goods are made, how info is processed, how we communicate, and how we sell our products and services

Question 14

Why do Canadians prefer local food>

Answer 14

• the domestic food industry support
• the environment
• the quality of food

Question 15

Here are a number of ways that governments get involved:

Answer 15

1. setting import and export laws
2. assigning tariffs to imports
3. becoming members of various trade
4. organizations
5. creating trade agreements with other nations
6. enacting economic sanctions and embargoes
7. establishing foreign policy and immigration laws and regulation