Week one - The global business environment

Question 1

what is globalisation

Answer 1

a social and economic phenomenon which implies a shift towards greater integration and interdependence amongst economies of different countries

Question 2

what are the indications of growing globalisation

Answer 2

the intensification of international flows of people, services, technology, knowledge, capitals and information

Question 3

what are the different globalisation levels

Answer 3

global/country/industry/company scale

Question 4

what does globalisation at a global scale indicate

Answer 4

greater worldwide convergence of variables and economic dimensions, such as consumer tastes, standardisation of products, economic policies and players, institutional organisations etc.

Question 5

what does more globalisation indicate

Answer 5

less importance of local issues

Question 6

what does globalisation at a country scale imply

Answer 6

that specific countries have different degrees of integration into the global economy

Question 7

what are the measures of degrees of globalisation of specific countries

Answer 7

1) foreign trade flow (X+M as % of GDP)
2) foreign direct investment (outflows or inflows as a % of GDP)

Question 8

what does globalisation at an industry scale imply

Answer 8

that there is a great interdependence of competitive positions of companies in a particular industry across countries

Question 9

what does globalisation at a company scale imply

Answer 9

that the company has extended its presence to all significant markets of the world, creates value in many countries and coordinates constant knowledge, capital and product flows, i.e. global dispersion of assets

Question 10

how is globalisation at a company scale measured

Answer 10

trans-nationality index (TNI): average foreign values over total sales, assets and employees (%)

Question 11

what are globalisation drivers

Answer 11

• internationalisation of firms
• economy liberalisation
• technology development

Question 12

what does economy liberalisation entail

Answer 12

• trade liberalisation
• liberalisation financial flows
• liberalisation of FDI flows

Question 13

pros and cons of free trade agreements

Answer 13

pros

• increased economic growth
• lower government spending
• technology transfer

cons

• increased job outsourcing
• poor working conditions
• degradation of natural resources

Question 14

what are indicators of technology development

Answer 14

cheaper and more efficient production

Question 15

what are indicators of firms’ internationalisation

Answer 15

offshoring due to locations’ comparative advantages

Question 16

deterrents of globalisation

Answer 16

• covid containment policies
• geopolitical tensions
• negative perception of globalisation
• increased transportation costs and logistic problems

Question 17

negative perceptions about globalisation

Answer 17

• unemployment in developing countries
• increased lifestyle diseases
• abandonment of culture
• environmental damage
• multinational companies gain power

Question 18

benefits of globalisation

Answer 18

• spread of technology and innovation
• free trade
• access to new markets
• creates jobs
• access to more goods and services

Question 19

what do MNC’s need to ensure (ethically)

Answer 19

corporate ethical behaviour

Question 20

what is CSR

Answer 20

corporate social responsibility: balancing the needs of different stakeholders, i.e. fulfilling economic, social and environmental obligations

Question 21

what is the United Nations global compact

Answer 21

a voluntary initiative based on CEO commitments to implement universal sustainability principles, thus supporting UN goals

Question 22

what are the four action areas of the United Nations global compact

Answer 22

• human rights
• labour (no child labour, elimination of discrimination and compulsory labour)
• environment
• anti-corruption (corruption is the misuse of entrusted power for private gain)

Question 23

what are the costs of corruption

Answer 23

• political costs
• economic costs
• social costs
• environmental costs

all leading to a weaker society as a whole

Question 24

advantages of ethical MNCs

Answer 24

• better reputation
• better employee motivation and productivity