Globalisation

Question 1

Globalisation

Answer 1

A process by which national economies, societies and cultures have become increasingly integrated through the global network of trade, communication, and transport

Question 2

5 Dimensions of Globalisation

Answer 2

Flows of Information 
Flows of Capital 
Flows of Products
Flows of Services
Flows of Labour

Question 3

Flows of Information Key Points

Answer 3

News, financial data
Email, internet, social media
People in different countries can communicate
Interconnected- learn about different cultures
Share ideas- development

Question 4

Flows of Capital Key Points

Answer 4

Money invested, historically within a country
FDI increased by nearly 4 times in last 20 years
Deregulation of financial services

Question 5

Why was the Deregulation of Financial Services a positive for flows of Capital?

Answer 5

Money moved more easily across national boundaries for:
Trade
Investment
Production

Question 6

Flows of Products Key Points

Answer 6

Historically made and sold in same country
Now made in LIC’s- reliance
Containerisation
WTO removal of taxes and tariffs encouraged global trade

Question 7

What reduces Flows of Products?

Answer 7

Protectionist economies

Question 8

Flows of Services Key Points

Answer 8

IT = global banking
Footloose companies
Deregulation of financial services means access to large markets
Low level services to LIC’s, cheap labour
High level services to HIC’s

Question 9

Flows of Labour Key Points

Answer 9

International- some level of wealth and education
Can lead to better working conditions
Can lead to worse conditions i.e. Filipino builders in Saudi Arabia live in slums
Interconnected- mix of cultures, family all over the world

Question 10

Importance of Marketing for TNC’s

Answer 10

Promoting and selling products everywhere
1 single market = 1 strategy
Economies of scale- cheaper- increase profit
Brand awareness

Question 11

Why do TNC marketing campaigns need regional adaptation?

Answer 11

Different laws

Different cultural attitudes i.e. alcohol

Question 12

5 Factors affecting Globalisation

Answer 12

Transport
Financial 
Management and Information Systems 
Communications
Security

Question 13

Factors affecting Globalisation: Transport

Answer 13

Containerisation
High speed rail and faster planes, people and products move around more quickly
Cars and infrastructure

Question 14

Factors affecting Globalisation: Financial

Answer 14

Links to technological advances and relaxed trade barriers

Internet means a potential investor can research a company- informed decisions

Question 15

Factors affecting Globalisation: Management and Information Systems

Answer 15

Allowed companies to change how they manage themselves
i.e. R&D, manufacturing, sales rarely on same site
Instant communication
Global transfer of money

Question 16

Factors affecting Globalisation: Communications

Answer 16

Satellites first launched in 1960’s- cheap wireless communication
Optic fibres- fast, almost instant communication
Rise in social media and instant messaging

Question 17

Factors affecting Globalisation: Security

Answer 17

Online security breaches cost £1.5 million each in UK
Global trade increases global security as countries are less likely to go to war
World Customs Organisation- stays ahead of crime relating to movement of goods and services
i.e. Illegal weapons trade, drug enforcement
EU Secure Operator Initiative - important with the relaxed tariffs of the trade agreement, if too long movement of goods is slowed

Question 18

HSBC

Answer 18

4th largest bank- 10 million customers
9,500 branches in 85 countries
First Direct, Bank of Bermuda (feels less global- more trusted)
HQ: Canary Wharf
Call Centres: India