IB Business & Management Unit 1.9 Globalization: Lesson 1: The Causes & Impacts Pages: 151-163
IB Business & ManagementUnit 1.9
Globalization:Lesson 1: The Causes & Impacts
Pages: 151-163
1. Focus Questions 1. What is globalization?
• 2. What are the causes and impacts of globalization?3. What are some indicators of globalization?
…
Think about it… In business, the competition will bite you if
you keep running. If you stand still, they will swallow you.~ William Knudsen (1879-1948), former
president of GM.
2. Overview
What is globalization?• The integration of the world’s economies in relation to their economics,
sociology, and politics.• It is an attempt to produce and sell the same products or services in
different countries. Why are companies interested in globalization? Is globalization the right move for some companies? What are some indicators of globalization?
• See Box 1.9a on page 152. …
Taken from: http://www.tcnj.edu/~franco6/images/large_globalization_e.bmp
3. Globalization
Globalization can also be defined as the growing interdependence of the world’s economies.• Whereby national economies join together into a single global
economy. With globalization, the political and economical decisions of one
country are likely to affect those in other parts of the world, too.• MNC will design and market their products to the world.
Products are easily recognizable. Same production processes. For example… - - - - - - - - - - - - >
…
image: http://news.bbc.co.uk/olmedia/1615000/images/_1619221_chinamac330.jpg
5. The Effects of Globalization on Business Activity
• There are many who criticize globalization.
• How many have watched, “Super Size Me”?
• Some argue that globalization is a form of cultural imperialism.• Do you
agree or disagree?
• For a business, globalization provides both opportunities and threats.
IB Business & ManagementUnit 1.9
Globalization: Lesson 2 : Multinational Corporations
Pages: 156-159
1. Focus Questions 1. What are the reasons for the
growth of MNCs?• 2. What role and impact do MNCs
have in the global business environment?
…
2a. Multinational Corporations
What is a MNC?• A business that operates in two or more countries.• It is also called a transnational corporation.
Can you give examples of some MNC?• Coke• Dell• Samsung• LG• Hyundai• Wendy’s
…
image: http://mancelovici.files.wordpress.com/2007/06/olympic-games-sponsors.gif
2b. Multinational Corporations
So, why become a multinational?• For several
reasons, such as…
…
3. Potential Problems
Despite the benefits of expanding overseas, there are certain problems that a MNC will encounter.
…
4. MNCs Effect on Host Countries
Despite the benefits of expanding overseas, there are certain problems that a MNC will encounter.• See page 158-
159 of your text.
…
IB Business & ManagementUnit 1.9
Globalization: Lesson 3: Regional Trading Blocs
Pages: 159-163
1. Focus Questions 1. What are trading blocs and what
are their major implications for businesses? …
2a. Regional Trading Blocs
RTBs try to… • eliminate trade barriers• Establish free international trade….see page 159.
2b. Regional Trading Blocs RTB will also…
• Impose physical barriers to international trade. Tariffs: will increase the price of exports, thus
reduce competition. Quotas: limits placed on the volume or value of
foreign goods and services.• This will limit supply and will have two major
effects: 1. It reduces the amount available for sale. 2. It raises prices due to limited supply. …
2c. Major RTB Around the World
2d. Recap Regional Trading Blocs (RTB) and Closer Economic
Partnership Agreements (CEPA) aim to:• Reduce or eliminate tariffs between its members.• Promote trade and investment facilitation.
In the end, there will always be winners and losers when joining these RTBs.• The winners:
Trade creation; when a country switches from buying products at a high cost to buying them from a lower cost country.
• The losers: Trade diversion; when a country switches from buying
products from a low-cost country to buying them from a higher-cost country.
The End.