Globalisation Flashcards
What is globalisation?
Growing interdependence of nations through increasing cross border transactions in goods and services and international capital flows facilitated by the rapid development of technology (IMF).
What is globalisation from Dickens business perspective?
It is the functional integration of internationally dispersed activities (assets, shareholders, personnel, organisations, value chain) facilitated by technology and liberalisation.
What are the three dimensions of globalisation?
1) Economic
2) Social
3) Political
What are the main characteristics of globalisation?
- Liberalisation of international trade
- Expansion of FDI
- Emergence of massive cross border financial flows
- Increased competition in global markets
Drivers of globalisation?
1) Policy decisions to reduce national barriers
2) Increase in and application of new technology (communications and informations)
3) Development of services that support international business
4) Growing consumer pressures
5) Increased global competition
6) Changing political situations
7) Increased international cooperation
Benefits of globalisation?
1) Opportunity to sell/ access global markets
2) Increases incomes
3) Increases living standards
4) Greater technology transfer
5) Increased integration resulting in promotion of human freedom and choice making
6) Increased democracy and cross cultural understanding
What are the benefits of globalisation to the developing world?
In the past 20 years the number of people living on $1 a day has halved.
New globalisers have reduced tariffs by 34%
Since the 1980s income per head in globalising developing countries has grown 3.5 times faster than non-globalising nations
Significantly reduced poverty and life expectancy
Costs of globalisation?
1) Threats to national sovereignty
2 Lose freedom to act locally
3) Economic growth and environmental stress
4) Consumption of non-renewable natural resources and increased environmental damage
6) Growing inequality and person stress
7) Inequality gaps
8) Off shoring moving production abroad
Why do companies engage in international business?
1) Expand sales
2) Acquire resources
3) Diversify or reduce risk
Challenges of globalisation to business?
Globalisation leads to a world in which market forces are dominant and MNCs locate to where markets dictate.
Uncontrollable world economy
Unpredictability due to potential rapid spread of crisis due to interconnectedness
