MNEs and the future of globalisation

Question 1

Drivers of Globalisation

Answer 1

• Worldwide reduction in barriers to trade and investment
• Market liberalisation
• Industrialisation
• Tech breakthroughs
• Integration of world financial markets
• Socio economic changes

Question 2

Global strategies

Answer 2

1. Market convergence
2. Efficiency advantages
3. Global competition
4. Government

Question 3

Global: borderless world

Answer 3

• Globally available information
• Similar customer needs = standardisation
• Increased buyer power
• Broader market coverage
• Increased rivalry
• EOS
• Flexible product sourcing
• High integration between world systems
• Greater opportunity for new development

Question 4

Globalisation benefits and costs

Answer 4

Benefits;
- Economic development 
- Rising standards of living 
- Promotes economic growth 
- Offers consumer choice 
- Price competition benefits consumers 
- Fosters tech innovation 
- FDI increases employment 
Costs;
- Unequal gains 
- Challenges for local firms 
- Destroys manufacturing jobs 
- Waste rates of unskilled workers 
- Leads to global inequalities 
- MNEs become more powerful than government 
- Environmental

Question 5

Critical Issues for MNEs

Answer 5

• Sustainability challenges
• Challenge for evolving landscapes
• Competitive challenge