Business In A Globalized World

Question 1

Globalization

Answer 1

Interrelated events
International trade and financial flow
Spread of technology, culture and politics

Question 2

IFTIs

Answer 2

International financial trade institutions
World bank - economic development assistance
- funds from members countries and borrow from international capital mkts
- voting power based on size of econ

Imf - stabilize currency exchange rates and international payment to facilitate trade

• lending foreign exchange to member countries
• demand cut spending, reduce wage, devalue, increase export and liberalize financial markets

Wto

• establish grounds rules for trade
• promote free trade
• eliminate barriers to trade (tariffs, duties, quotas)
• does not lend money or forex
• negotiations called rounds

Question 3

Benefits of globalization

Answer 3

1. Increase economic productivity
   (Comparative advantage - countries doing what they best at)
2. Reduced prices for consumers
   - global market
   - lower production costs
   - wider range of products
3. Access to foreign investments for economic development
   - transfer of technology and investments
4. Transfer of technology
5. Spread democracy and freedom, reduce conflicts
   - global commerce deter conflicts because of business interactions

Question 4

Cons of globalization

Answer 4

1. Job insecurity
   - race to the bottom in search of lower production costs
   - move jobs oversea means local workers are laid off or reduced wages)
2. Weakens environmental and labor standards
   - companies look for sites where regulations are most lax (weak regulation of occupational health and safety, hours of work and few union rights)
3. Prevent nation from adopting policies related to social/ environmental objectives
4. Erodes national/ regional culture and undermine diversity (anti americanism)
5. Compatible with despotism
   (Absolute power to control workers easier and block efforts to protect environment)

Question 5

Political & economic systems

Answer 5

Free enterprise system

central state control

Question 6

Bottom of the pyramid

Answer 6

<3k per year

Question 7

Microfinance

Answer 7

Provide loan to low income family who lack access to banking

Question 8

GAN

3 sector world

Answer 8

Civil society
Business
Government

Difference in resources to be exploited and draw on unique capabilities to overcome weakness each has to accomplish a common goal

Question 9

Debt relief

Answer 9

Reduce a nation’s payment and enable them to direct resources to alleviate poor