Globalization, firms and the business environment Flashcards
international business d
performance of trade and investment activities by firms across national borders
international trade d
exchange of products and services across national borders
international investment d
transfer of assets to another country, or the acquisition of assets in that country
international business …
conducted across national borders,
uses distinctive business methods,
is in contact with countries that differ (in terms of culture, language, political system, legal system),
it is a ‘risk’ to the firm
what are some examples of flows
knowledge,
trade in products,
trade in services,
direct investments
world trade is growing ______ than GDP
faster
what does ICT stand for
information and communications technology
ict …
advances in computers digital technologies phones and internet,
mnes leverage ict to optimise performance (managing operations around the world),
icts opened global marketplace to firms that lacked resources to internationalise
declining cost of global communications and ______ growing number of internet users
growing
example of a place that drives globalisation
silicon valley
globalisation emerged in ____ and coined the phrase _____ village
1962,
global
what can be some challenges for businesses (basic at start of globalisation)
tight margins between success and failure,
economic, political and regulatory,
competition from emerging markets
Example of competition from emerging markets
japanese competitive pressure on general motors
globalisation d
growth in international trade, capital flows, ability of people to travel, communicate and work across increasingly interconnected world
organised capitalism …
organisation of production, labour and consumption,
rise of multinational corporation
what is disorganised capitalism
1970s failure of fordism (mass production),
flexible specialisation,
industrial restructuring (rise in service sector),
rise of informal economy,
offshoring (call centres)
primary motives for internationalisation
profits,
growth,
international reputation,
competitive advantage
secondary motives for internationalisation
supportive government,
economic growth and emerging markets,
liberalisation of trade barriers,
technological advancement
how can a supportive government encourage internationalisation and what could be some problems that could emerge for the firm
if states want to attract investment,
have to adapt to economic environment,
new legal system
what are some firm specific reasons for internationalisation
access to markets,
access to resources,
access to cost reduction
multinational corporation d
firms with more than six subsidiaries in other countries, including its own
what is dunning’s theory
in order to internationalise it needs advantages over local firms, ownership advantages, location advantages, internationalisation advantages
what three advantages does an mnc need to internationalise according to dunnings theory
ownership advantages,
location advantages,
internationalisation
ownership advantages d
firm specific advantages like knowledge, skills, technology, intellectual, internal and external relationships (buyers sellers suppliers)
location advantages d
firm specific locational advantages like access to market, proximity to clients, customers and suppliers, low production costs, stable political and economic environment
internationalisation advantages d
firm specific advantages to retain quality control, corporate reputation, ip
if firms rely on local knowledge do they have high or low within density and across density
high within density,
low across density
within density d
density of ties within each of the local organisation sets
across density d
density of ties within the total external network, that is across the different organisation sets
what kind of density do icts encourage
across density
global is never directly global but mediated through an increasing international interface between _____ and _____
people,
things
task for mncs to ‘manage differences’ to guarantee enough similarity and compatability to function but also the competitive edge and ______ necessary to ______
distinction,
succeed
since 2008, economic growth rates (production, trade, investment) have ______ in most of the developed world
plummeted
how did the financial crisis signify the end of globalisarion
collapse of banks like lehman brothers, who epitomised the free market ideology (free and efficient markets that the market knows whats best and hindrances to its efficient operation especially by the state are undesirable)
ideological definition of globalisation
neo-liberal, free market ideology of the globalisation project
empirical definition of globalisation
actual structural changes that are occurring in the way the global economy is organized and integrated
hyper-globalist d
someone who argues that we live in a borderless world where globalisation is the new economic (as well as political and cultural) order, where nation states are no longer significant actors or meaningful economic units and consumer tastes and cultures are homogenous
what is the view of the neo-liberals on the right - pro globalisers
globalisation is an ideological project that will bring the greatest benefit to the greatest number of people, problem is that there is too little globalisation (needs to be more)
what is the view of the hyper-globalisers of the left - anti-globalisers
globalisation is the problem not the solution, free markets create inequalities, unregulated markets lead to a reduction in well-being for all but a small minority in the world as well as creating environmental problems
where
3/4 down on page 5
_______ are central because of the importance of knowledge flows to successful embeddedness
intangibles
embeddedness d
effectively linked between home company and local company as an mnc being able to adapt and find a home
what are the challenges of embeddedness
challenges to achieving internal embeddedness,
challenges of organisational inertia,
challenges of institutional inertia
what are challenges of organisational inertia
adapting to new location changes core brand
localizing process d
geographically concentrated economic activities with varying degrees of functional integration
internationalizing process d
simple geographical spread of economic activities across national boundaries with low levels of functional integration
globalizing processes d
both extensive geographical spread and a high degree of functional integration
regionalizing processes d
operation of ‘globalising’ processes at a more geographically limited scale, ranging from highly integrated and expanding eu to much smaller regional economic agreements
in a simple division of labour diagram what do both the core and periphery do (pre 1950)
core - production of manufactured goods,
periphery - source of raw materials and foodstuffs, market for manufactured goods
what was the main political division after the second world war and who benefitted
geopolitical division between the capitalist west and the communist east,
USA emerged from the war strengthened
how much of global gdp did the usa account for by 1950
more than one quarter
what are the three main dimensions of interconnectedness
trade has grown faster than output,
foreign direct investment has grown faster than trade,
serious structural imbalances in the world economy have emerged
explain trade has grown faster than output
exports have grown much faster than output in virtually every year, importance of trade to national gdp has increased significantly, countries are becoming more tightly interconnected through trade flows
fact about global FDI stocks from early 1990s to 2011
early 1990s - 10% of world GDP
2011 - 30% of world GDP
what is a significant amount of world trade actually
intra-firm trade which is not subject to external market prices
what is a significant amount of world trade actually
intra-firm trade which is not subject to external market prices
the usa has been overtaken as the world’s leading manufacturing producer by ______
china
how has fdi in the united states changed over time
1960 50% of world’s fdi, 20% today,
used to be a lot more outward fdi than inward however much more balanced today
before the global financial crisis what was european growth rates compared to the rest of the world
2000-2007, 2.3%, significantly lower than than the world average of 3.2%
europe remains a major magnet for ______ ________ as well as the leading source of ______ ____
inward investment,
outward fdi
why did the transitional economies of eastern europe and russian federation struggle after the breakup of the ussr
from a centrally planned economic system with heavy emphasis on basic manufacturing industries to a capitalist market system
who are the four tigers
hong kong, korea, sigapore and taiwan
explain the resurgence of asia
rise of japan after second world war,
rapid growth of four tigers,
re-emergence of china,
potential dynamism of india
explain the rise of japan after the second world war
from 1960s to late 1980s very high growth rates (manufacturing especially),
in late 1980s rapid growth fell as dramatically as it had risen
explain the rapid growth of the four tigers
rapidly rising manufacturing sectors from 1960-1990s
explain the re-emergence of china
between 1980 and 2003 china’s growth rate was the highest in the world,
exports as a share of GDP increased,
how has the immense impact of china on the global economy been especially significant
through its effect on the price of commodities (biggest consumer of steel, aluminium, copper, zinc),
through its effect on the prices of manufactures (especially labour-intensive products),
through its impact on capital flows (accumulation of current account surpluses)
explain the potential dynamism of india
spectacular growth in outsourcing of it services (software data processing call centres),
however does not have strong export base in manufactures,
still a way off china
what does bric stand for
brazil, russia, india, china
explain what has happened in latin america recently
growth rates lagging behind those of the emerging economies,
brazil hit by slowdown in commodity prices,
mexico fared better high export trade growth in the 1990s however was being outcompeted by china,
recently performed much more strongly due to advantageous geographical proximity
economic peripherality d
parts of the world enmeshed in the deepest poverty and deprivation (and whose existence poses one of the biggest social challenges of the 21st century)
how have the sub-saharan african countries developed recently
are growing due to exports however the continuation of the growth is highly susceptible to external shocks,
such as insatiable demand by china for resources has driven growth in several african countries (dependent on china’s growth)
what is the biggest single global shift reshaping the contours of the global economic map
the resurgence of east asia to a positon of global significance
