Globalisation Flashcards
Definition of globalisation
Process of the worlds economies, political systems and cultures becoming more interconnected
3 aspects of globalisation (3++)
Economic = long distance flows of goods, capital and services
Social = spread of ideas, info, images + people
Political = diffusion of gov policies
What if there was NO globalisation
There would not be any interaction between different countries
If there was complete globalisation
Whole world would act like a single community
What does the KOF index do
It scores each country:
A = Most globalised countries = Canada + Australia
B = Not as globalised = USA, China and Russia
C = Least globalised = Afghanistan, Nepal + Myanmar
What are global systems (2+)
Any organisations, groupings or activities that link different parts of the world
E.G = TNC operate in 2 or more countries = linking their economies
What are the driving forces of glbalaisation (3)
Development of systems, tech, and relationships in a range of sectors
How do systems create globalisation (2+)
Includes ways of working, procedures and methods of organisation that allow a particular function to be carried out
Easier for flows of information, capital, products, services and labour to cross national boundaries
How has globalisation improved relationships (2)
Before WW2 most relationships between countries involved one country losing and another gaining
Nowadays relationships are based on trade and common rules – these allow everyone involved to gain
Global Financial system what (2)
Governs the flows of capital between countries
Based on companies called investment banks
Main role of investment banks (3)
To help companies raise capital by selling shares on behalf of those companies
People or groups who buy shares are called investors
They receive a fraction of the profits that the company makes
What global trad system
Governs the flow of products between countries
Trade Controls (3)
Tariff
Banning
Non tariff - technical standards
What do controls do and what can be done to offset this (2+)
Make products more expensive
Cheaper if enter a trade agreement
Example = NAFTA
What type of trade agreements
Bilateral = 2 countries
Multilateral = between several
What WTO(5)
Established 1995
Governs world trade system
Sets rules on trading
Acts as a forum to negotiate trade deals
Settles disputes
How have transport + communication improved global business
People + products can go anywhere
Examples of improved transport (2)
Containerisation = quicker + cheaper
Developed over past 20 years = Free communication = email
What systems have increased companies efficiency (2)
Management and information systems
New ways of working = products can be made cheaper
How do companies supply chains minimise costs (3)
They’ve become global
A company’s supplier, factory, research + development department may all be in different countries
Cheaper
What can large companies benefit from (3)
Economies of scale
They can reduce the average cost per item by purchasing specialised equipment and using production lines.
Buy raw materials at a lower price = bulk buy
What is outsourcing (3)
When a company pays another company to do work that in the past would have been done in-house
Saves costs
Cheap labour costs mean many companies choose to outsource abroad
How have work practices chnaged (2)
Casual and temporary contracts allow companies to take on workers as they are required
Not having to pay fixed yearly wages saves money
How does globalisation improve security (2)
War is less likely = interdependent
Security = increased flows of capital, labour, products, services + info
Why can globalisation make conflict more likely (3)
Developed countries intervene in conflicts in developing countries
So they can secure resources = oil
What is capital
Money that invested
Trade blocs
Associations between different countries that promote and manage trade
TNC
Companies that operate in more than 1 country
HICs relationship with LICs (3)
Mainly export high value goods to LICs
Import primary products which are of less value
BoT surplus
LICs relationship with HICs (3+)
Export low value goods to HICs (if any)
BOT deficit
Mainly import manufactured goods (expensive)
