Submitted By K.

ShaliniDevi

GLOBALIZATION

Globalization refers to in which activities of large number of

business enterprises is carried out in many different locations across national boundaries

Increase trade across national boundaries One company having subsidiary companies and plant in

many countries

One company procuring material required from multiple countries

Growth of joint ventures and technical collaboration between

companies from different countries

It is much more than just importing or exporting from one country to another country

True globalization involves one firm procuring form

manufacturing in and selling in many different countries.

There has been and increasing trends in the worlds.

KEY TERMS

An international business any business with international sales, sourcing, or investment

A multinational business any business with productive

activities in 2 or more countries

A global business a business that takes a global approach to production and sourcing (Coca-Cola, Intel)

TWO FACTORS UNDERLIE GLOBALIZATION

Decline in barriers to the free flow of goods, services, and capital that has occurred since the end of World War II

Technological change

The role of technology

Lowering of trade barriers made globalization possible

Technology has made it a transforming movement

Managing an international business is different

Countries are different International transactions involve converting money into different currencies

Range of problems in an international business is wider and

problems are more complex

International business must cope with different, conflicting government rules and systems

Different strategic approaches required

The Emergence of Global Institutions

Notable global institutions include

The World Trade Organization (WTO) which is responsible for policing the
world trading system and ensuring that nations adhere to the rules established in WTO treaties

In 2008, 151 nations accounting for 97% of world trade were members
of the WTO

The International Monetary Fund (IMF) which maintains order in the

international monetary system

The Emergence of Global Institutions

The World Bank which promotes economic development The United Nations (UN) which maintains international peace and security, develops friendly relations among nations,

cooperates in solving international problems and promotes

respect for human rights, and is a center for harmonizing the actions of nations

The most global markets are for standard goods

Aluminum Wheat Microprocessors

Aircraft
For many consumer end-products, huge differences still exist among national markets Food, clothing, entertainment

Today everyone knows

Nintendo Starbucks Coca-Cola

Ikea
McDonalds Samsung

Managing in the Global Marketplace

Much of this course is concerned with managing an international Business i.e., any business with international

sales, sourcing, or

Investment.

Currency Controls
Restrictions on the convertibility of a nations currency Limit the amount of globally accepted currency available to pay for imports

Set an unfavorable exchange rate when paying for imports

International Trade Relations

International trade relations examines the political, legal and institutional aspect of todays global trading system.

If focuses on policy, law, business and issues of global trade relations.

Specially , it focuses on the WTO and the role of the us in GTR.

This course assesses critical issues concerning global trade.

Its dispute resolution system the current round of global

made negotiations.

The Globalization Merits & Demerits

MERITS
Lower prices for goods and services Economic growth Increase in consumer income Creates jobs (for many)

Countries specialize in production of goods and services

that are produced most efficiently

The Globalization Merits & Demerits

MERITS
Availability of greater variety of goods and services to the

consumer.
Faster and wider spread of new technologies across the world. More competitors price to the competitors. To attracting investors.

MERITS
Availability of greater variety of goods and services to the

consumer.
Faster and wider spread of new technologies across the world. More competitors price to the competitors. To attracting investors.

DEMERITS
Destroys manufacturing jobs in wealthy nations Wage rates of unskilled in advanced countries decline Companies move to countries with fewer labor and environment regulations Loss of sovereignty Homogenized cultures

DEMERITS