Factors affecting globalisation

Question 1

Time-space convergence

Answer 1

The time it takes to travel between places is getting shorter, so distant places are brought closer.

Question 2

Systems

Answer 2

The ways of working, procedures and methods of organisation that allow a particular function to be carried out.
e.g. the just-in-time manufacturing system is a way of making products in response to the demand for them.
Since the 1940s, new systems have been introduced to make it easier for flows to cross national boundaries.

Question 3

Relationships

Answer 3

Before the second world war, relationships between countries often meant that one country lost and one country gained. Nowadays, relationships are based on trade and common rules.

Question 4

Financial systems

Answer 4

The global financial system governs the flows of capital between countries.

Question 5

Investment banks

Answer 5

Companies that financial systems are based on. Their role is to help companies by selling capital by selling shares on their behalf.

Question 6

Investors

Answer 6

People or groups who by shares.

They receive fractions of the profits that the company makes.

Question 7

Information technology

Answer 7

In the 1980s, technology such as the internet allowe investors greater access to information.
They could easily find out how well a company was doing and make informed decisions about whether or not to invest - making foreign investment less risky.

Question 8

Financial deregulation

Answer 8

Undertaken by governments around the world n the 80s.
Rules on what banks were allowed to do we relaxed, and they could invest in a greater range of businesses.
They also involved removing barriers to capital coming in and out of countries, making it easier for investment banks to buy and sell shares and products around the world.

Question 9

Changes brought about by financial deregulation

Answer 9

A greater range of companies go involved in finance e.g. commercial banks also started selling shares.
Investment banks were able to take on a greater number of services, such as exchanging currencies between countries to allow them to trade across national borders.

Question 10

Global financial system

Answer 10

Investors, banks and other companies all over the world are part of the global financial system, meaning that decisions made can affect a company on the other side of the world.
HOWEVER it is concentrated in a number of western economies and the bulk of flows are between specialised districts in world cities.
Nevertheless there are important flows of money through remittances, FDI, loans, aid, repatriation of profit and trade.

Question 11

Transport and communications

Answer 11

Improved transport has allowed people and products to travel around the world faster than ever before.
Over the past 20 years there has been a significant growth in software that allows free communication from anywhere in the world.

Question 12

Frictional affect of distance

Answer 12

The theory that areas that are close together are more likely to interact. Transport and ICT has meant there has been a reduction in this affect.

Question 13

Enabling technologies

Answer 13

Inventions or innovations that allow a user or business to significantly impact the way they operate.

Question 14

Electricity

Answer 14

Developed in the 19th century, before this, information could only travel as quickly as the prevailing transport system would allow.

Question 15

Major developments in transport technology

Answer 15

Railways enabled faster movement over land, which was previously especially slow.
Major break-throughs such as steam power, the use of iron and steel, railway tracks and ocean-going vessels enlarged economic activity.

Question 16

TNCs link to transport

Answer 16

The take off of TNC growth and the take off of commercial jets both occurred in the 50s- hardly coincidental.

Question 17

The need for communications

Answer 17

In the 19th century, rail and ocean transport needed electric telegraph and oceanic cable for their development.

Question 18

Texas |nstruments

Answer 18

An electronics TNC that has 50 plants in 19 countries. Operates using a satellite-based communication system to coordinate planning, accounting, customer service etc on a global scale.
This is an example of how communications are essential to the operations of TNCs and that only large companies are able to utilise communication technologies fully.

Question 19

Trade agreements

Answer 19

The global trade system governs the flow of products between countries.
Controls on trade make it more expensive for sellers and consumers.
Trade agreements act like contracts and there are benefits for both/all countries involved.
Multi-lateral + Bilateral agreements = global trade system.

Question 20

Management and information systems

Answer 20

New ways of working to improve the efficiency of companies.

Question 21

Minimising costs

Answer 21

Having global supply chains - suppliers, factories and research may all be in different countries.
Outsourcing - when one company pays another company to do work that would have previously been done in-house.
Working practices e.g. zero hour contracts.
Making products in bulk - this gives large companies an advantage.

Question 22

Security threats

Answer 22

Trade wars are less likely because if countries are dependant on each other it is in their best interests not to be at work with one another.
HOWEVER conflict may be more likely e.g. oil

Question 23

NATO

Answer 23

The North Atlantic Treaty Organisation was founded by several countries in 1949 with the aim of providing security during the cold war. By grouping together they were able to deter common threats.