globalization • Definition – An economic phenomenon – A

							•   Definition:
    – An economic phenomenon?
    – A social phenomenon?
    – A cultural phenomenon?
•   The movement towards the expansion of
    economic and social ties between
    countries through the spread of corporate
    institutions and the capitalist philosophy
    that leads to the shrinking
    of the world in economic terms.
Globalisation



                Globalisation
                could involve
                all these
                things!
   The increasing reliance of
    economies on each other
   The opportunities to be
    able to buy and sell in any
    country in the world
   The opportunities for
    labour and capital to locate
    anywhere in the world
   The growth of global
    markets in finance
•   Made possible by:
    – Technology
    – Communication networks
    – Internet access
    – Growth of economic cooperation – trading blocs
      (EU, NAFTA, etc.)
    – Collapse of ‘communism’
    – Movement to free trade
   Benefits of Trade:
    ◦ Increased choice
    ◦ Greater potential for
      growth
    ◦ Increase
      international
      economies of scale
    ◦ Greater employment
      opportunities
   Disadvantages
    of trade:
    ◦ Increase in gap between
      the rich and the poor
    ◦ Dominance of global
      trade by the rich,
      northern hemisphere
      countries
    ◦ Lack of opportunities for
      the poor to be able to
      have access to markets
    ◦ Exploitation of workers
      and growers
   Multi-national
    or trans-national
    corporations
    (MNCs or TNCs) –
    businesses with
    a headquarters
    in one country but
    with business
    operations in a
    number of others.
   Characteristics:
    ◦   Expanding revenue
    ◦   Lowering costs
    ◦   Sourcing raw materials
    ◦   Controlling key supplies
    ◦   Control of processing
    ◦   Global economies
        of scale
   Key Issues:
    ◦ Damage to the
      environment?
    ◦ Exploitation of labour?
    ◦ Monopoly power
    ◦ Economic degradation
    ◦ Non-renewable
      resources
    ◦ Damage to cultures
   Accountability
    of Global businesses?
   Increased gap
    between rich and poor
    fuels potential
    terrorist reaction
   Ethical responsibility
    of business?
   Efforts to remove
    trade barriers
 Multinational corporations are companies
that manufacture and market the products or
services in several countries.
   Single managerial authority
   Central management group
   Multinational marketing offers
   Integrated worldwide business system
   FACTOR MOBALITY
   ECONOMIC REFORM
   OPENING UP OF COMMAND ECONOMIES
   MANAGEMENT CULTURE
   GROTH URGE
   MARKET POTENTIAL
   RISK MINIMIZING
   DEVELOPMENT IN COMMUNICATION TECHNOLOGY
   GLOBALIZATION
   INNOVATION
   BOP IMPACT
   LCD’S BENEFIT MUCH
   CAPITAL MARKET
   TECHNOLOGY TRANSFER
   INDEGENIZATION
   EMPLOYMENT
   R & D EFFORTS
   Drain of resources for profit maximization
   Economic threat
   Monopoly growth
   High profit orientation
   Influence on culture
   Interference in States’ Sovereignty
   Evasion of taxes
   More competitiveness
   Merger and Acquisition
   Explore new untapped market
   Flexibility
   Increasing international competition
   Global consumer awareness
   Technology advancement
   Growing role of private sector
Thanking You