Unit 1

Question 1

What is globalisation?

Answer 1

Globalisation refers to the shift towards a more integrated and interdependent economy, reflected in the increasing cross-border flows of goods, services and capital.

Question 2

What are the 5 drivers of globalisation?

Answer 2

1) Reduction of trade barriers
2) market liberalisation and adoption of free markets
3) industrialisation, economic development and modernisation
4) integration of world financial markets
5) technological advancements

Question 3

What is arguably the most important driver of globalisation?

Answer 3

Technological advancement as this provides a means for globalisation

Question 4

What are the main 5 dimensions of globalisation?

Answer 4

1) integration and interdependence of global markets
2) rise of economic blocs
3) growth of global investment and financial flows
4) globalised markets & consumer buying behaviour convergence
5) globalisation of production & services

Question 5

What are the firm level advantages to globalisation?

Answer 5

• New opportunities
• minimisation of cost, increased efficiency and quality
• technological advancements create competitive advantages
• easier to hire skilled workers
• cluster of factories
• rapid response to scaling production

Question 6

What are the firm level disadvantages to globalisation?

Answer 6

• New risks & intense rivalry from foreign competitors
• more demanding buyers who can source from worldwide suppliers
• internationalisation of the value chain > increased difficulty managing problems promptly

Question 7

What are the societal advantages of market globalisation?

Answer 7

Great prosperity for all: increased living standards for nations that have opened their borders to international trade and investment

Question 8

What are the societal disadvantages of market globalisation?

Answer 8

• contagion: rapid spread of financial and monetary crises
• loss of national sovereignty
• rise in nationalism
• offshoring and flight of local jobs
• effects on the poor: worker exploitation, exacerbating income inequality; downward pressure on the wages of unskilled workers
• effects on the natural environment: increased energy usage and demand, habitat destruction, increased waste
• cultural imperialism