Globalisation Flashcards
1
Q
What is globalisation?
A
- The shift towards a more integrated and interdependent world economy
- A process rather than a fact, trend or structure
- Freedom is the central issue
2
Q
What are the components of globalisation?
A
- Consumption
- Markets
- Production
3
Q
What is the globalisation of markets?
A
- Merging of historically distinct and separate national markets into one huge global marketplace
- Most global of markets are not typically markets for consumer products - where national differences in tastes and preferences can still be important enough to stop integration, but rather industrial goods and materials that serve universal needs
4
Q
What is the globalisation of production?
A
The sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production
5
Q
Why do firms engage in international business?
A
- To expand sales
- To acquire resources
- Lower costs, operating knowledge
- To diversify or reduce risks
6
Q
What necessitated the emergence of global institutions?
A
- To help manage, regulate and police the global marketplace
- To promote the establishment of multinational treaties to govern the global business system
7
Q
What are the growth drivers of international business?
A
- Technology
- Liberalisation of cross-border trade and resource movements
- Development of services that support international business
- Growing consumer pressures
- Increased global competition
- Changing political situations
- Expanded cross-national cooperation
8
Q
Changes in what factors describe globalisation?
A
- Trade of goods/services
- FDI
- Capital market turnover
- Repatriation
- Number of MNC’s
- Employment, sales, assets of MNC’s
9
Q
What are the pros of globalisation?
A
- Promotes global economic growth
- Creates employment
- Increases competitiveness (and innovation) between firms
- Reduces consumer prices
- Increases consumer choices
- Increased information flows and spread of ideas
- Provides less developed countries with access to foreign capital and tech
- Cultural intermingling promotes understanding
- Increase international co-operation on economic, social and environmental issues
10
Q
What are the cons of globalisation?
A
- Economics crises are transmitted
- Destroys (manufacturing) jobs in developed countries
- Exploits labour in LDC’s with weak labour/environmental laws
- Causes environemtnal destruction in LDCs with weak environmental protection laws
- Loss of national sovereignty to undemocratic international organisations
- Increases income gap between world’s rich and poor nations
- MNC’s have the ability to exploit tax havens to avoid paying domestic taxes
- MNC’s are increasingly influencing political decisions
- Accelerates the spread of communicable diseases