3.2.1.1 Globalisation

Question 1

Globalisation

Answer 1

Globalisation is the process by which the world is becoming increasingly interconnected.

It is the movement of people, knowledge, ideas, goods and money across national borders , leading to - theoretically - a ‘borderless world’.

As the world becomes more globalised, countries are becoming more interdependent.

Question 2

What causes globalisation?

Answer 2

Globalisation is caused by the movement of information, capital, products, services and labour between countries.

The development of new systems, technology and relationships have been the driving force behind this process.

Question 3

Financial systems and globalisation

Answer 3

International trading is now faster and easier than ever before. The global financial system provides a framework to facilitate flows of capital.

Electronic trading systems mean that companies around the world can trade rapidly and securley.

Question 4

Transportation improvement and globalisation

Answer 4

The increased size and standardization of many containers used to transport goods has mean that transport of manufactured goods is now more efficient.

Reductions in cost, computerised logistics systems and data analysis of efficiency of handling and distribution have also facilitated freer movement, for example the use of standardised containers for sea, rail, road and air transport.

Question 5

Security issues and globalisation

Answer 5

Many security issues challenge an increasingly globalised economy. Main ones include;

• Terrorism
• Organised crime
• Bio-security
• Cybercrime

However thanks to improvements in technology, these issues are being mitigated (e.g. x-rays at airports).

Increased interdependence also means that the likelihood of wars starting is decreased. Countries working together can also deter common threats

Question 6

Communication technology improvement and globalisation

Answer 6

Advances in technology are one of the main reasons for rapid globalisation.

Communication links between countries have grown because of:

• Development of computer technology
• Expansion of the internet
• Increased usage of mobile phones
• Robotic technologies
• Computerised logistics systems

Question 7

Management and information systems and globalisation

Answer 7

Companies’ supply chains have become global. Large companies can take advantage of economies of scale.

Outsourcing has also become increasingly popular as it means that work does not have to be done in house, saving costs.

Working practices have also changed. Temporary contracts mean that firms do not have to hire workers when they don’t need them.

JIT technology has also enabled a range of cost-saving advantages.

Question 8

Trade agreements and globalisation

Answer 8

Globalisation has accelerated due to trade agreements across the world. Countries trade products to different countries; millions of products are imported and exported into and out of countries every year. Trade agreements have made globalisation deepen and accelerate as they make international trading less expensive and easier.