Globalisation

Question 1

What is globalisation?

Answer 1

• the process of the worlds economies, political systems and cultures becoming more strongly connected to each other

Question 2

5 factors that promote globalisation

Answer 2

Flows of:
L-abour
I-nformation
S-ervices
P-eople
C-apical

Question 3

Flows of information

Answer 3

• information such as data or news can be easily spread across the world
• email, internet and social media have all contributed to this
• learn about cultures without leaving your own country
  EXAMPLE - 91% of the population now use a mobile devise

Question 4

Flows of capital

Answer 4

• money that is invested = spent to produce an income or increased profit
• foreign investment has increased = FDI (foreign direct investment)
• improvements in ICT = capital can be moved around the world

Question 5

Flows of products

Answer 5

• in the past products were manufactured and sold within the country mostly HICs = now decreased
• lower labour costs = production moving to NEEs and LICs
  EXAMPLE - UK imported £200 billion in 1990 = £550 billion in 2008

Question 6

Time space compression

Answer 6

A set of processes that cause the relative distance between places effectively seem “closer”
- factors include flight, TV and cars

Question 7

Flows of services

Answer 7

• economic activities that aren’t based around producing any material goods e.g. banking
• improvement in ICT has allowed companies to become global such as more communication
• DEREGULATION in the 1970s and 1980s = removal of rules to increase competition —> made it easier to do business in other countries

HIGH LEVEL services = financial services, cities, more developed countries
LOW LEVEL services = customer service, less developed countries, cheaper labour

Question 8

Flows of labour

Answer 8

• movement of people who participate in the workforce from one country to another
• more people are moving overseas (international migration) increased over 40% between 2000 and 2015
• some are highly skilled = ICT and medical workers so move to more developed countries
• unskilled workers = move to developed countries because of unemployment or poor wages in their own
• increases interconnection = people bring aspects of their culture with them
  EXAMPLE - Northern America = 1.1 million immigrants

Question 9

How is marketing becoming more global?

Answer 9

• global marketing involves treating the world as one single market
• cheaper to have one marketing campaign for the whole world
• increases global brand awareness e.g. identifying famous logos
• has to be adapted to the specific country due to laws and attitudes

Question 10

What is globalisation the result of?

Answer 10

• new systems, technology, relationships

Question 11

Factors affecting globalisation - How do financial systems promote globalisation?

Answer 11

• global financial system governs the flows of capital between countries
• companies called investment banks = help companies to raise capital
• in the 1980s = information tech and new financial products made the financial system more global

Question 12

Factors affecting globalisation - Global trade system and trade agreements

Answer 12

• global trade system governs the flows of products between countries
• trade is primarily regulated by the countries governments e.g. tariffs, price, non-tariff barriers and banning of certain goods
• trade agreements make it cheaper = benefits both countries
• global trade system is governed by the World Trade organisation (WTO) = sets rules

Question 13

Factors affecting globalisation - How have transport and communication systems improved global business?

Answer 13

• improved transportation
• uniform shipping containers introduced in 1950s = allowed more goods to be loaded on and off of ships
• air transport = increase the speed of delivery of goods

Question 14

Factors affecting globalisation - How has management and information increased companies efficiency?

Answer 14

• companies supply chains have become global e.g. supplier may be in a different country to their factory
• minimises their cost
• large companies can save money by buying in bulk
• outsourcing = when a company pays a other to do work that may have been done internally before and saves money
• cheaper labour costs

Question 15

Factors affecting globalisation - Companies work together to prevent security threats

Answer 15

• by countries creating trade agreements with one another this makes them become interdependent
• this can reduce war as countries are providing for each other = improves security
• however …. Globalisation can make conflict more likely