LEARNING UNIT 1: CHAPTER 1: GLOBALISATION AND INTERNATIONAL BUSINESS
1.3 DEFINING GLOBALISATION
Globalisation refers to the increasing integration of production, development and
communication amongst nations on a worldwide/international scale.
Globalization is a process of interaction and i...
MNB37-Study-notes - Study notes for Global Business
Management
Global Business Management IA (University of South Africa)
written by maria francisco
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MNB3701 study notes
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PRINCIPLES OF GLOBAL BUSINESS MANAGEMENT
(MNB370-1)
LEARNING UNIT 1: CHAPTER 1: GLOBALISATION AND INTERNATIONAL BUSINESS
1.3 DEFINING GLOBALISATION
Globalisation refers to the increasing integration of production, development and
communication amongst nations on a worldwide/international scale.
Globalization is a process of interaction and integration among the people , companies ,
and governments of diferent nations , a process driven by international trade and
investment and aided by information technology . Globalisation is the process by which
businesses or other organisations develop international infuenceess or start operating on
an international scale.
The key interlinked factors infuencing the tendency towards globalisation are as follows:
- GATT eGeneral Agreement on Tarifs and Trade eGATTs Deinition: Multilateral
international trade treaty irst created in 1947 and frequently amended. ... GATT was
active under that name from 1947 until 1994, when WTO was founded. The records of
GATT are now managed by WTO in Genevas and WTO eThe World Trade
Organization eWTOs is the only global international organization dealing with the rules
of trade between nations . At its heart are the WTO agreements , negotiated and
signed by the bulk of the world's trading nations and ratiied in their parliaments.s
- Structural shift in the world economy
- Integration and operational velocity of inancial markets
- Difusion of computer-based technologies and information systems
- The “agile” corporation
- Competitiveness based on supply chains
WTO – The World Trade Organisation and GATT – General Agreements on Tarifs
and Trades
WTO is the only global international organisation feeling with the rules of trade between
nations . It's purpose is to ensure that global trade commences smoothly , freely and
predictably . It creates and embodies the ground rules for global trade among member
nations , ofering a system of international commerce . At its heart are the WTO
agreements, negotiated and signed by the bulk of the world's trading nations.
GATT – mainly deals with trade in goods, it is used for ordering international trade
relationships which brought the WTO into being.
Perspectives of globalisation
Culture- process of transformation in the spatial organisation of social relations and
transactions that generate fows and networks of activity.
Economic- the growing, interdependence of countries worldwide through the increasing
volume and variety of cross -boarder transactions in goods and services , international
capital fows and technological advances.
Forces of globalisation
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1. Political forces – factors such as trade barriers , recognition of intellectual
property rights , move towards privatisation as well as establishing common
technical structures.
2. Economic forces – includes increasing world trade, rising income levels, efcient
inancial markets , increasing competition and trafcking government
involvement.
3. Social forces – includes growing consumerism, conveying consumer tasks and
improving lifestyles, education and skills.
4. Technological forces – includes industrialisation of nations , improved
transportation and networks and the infuence of the information and
telecommunication revolution, including the internet and e-commerce.
The face of globalisation eCapitalist globalisations
Globalisation involves:
- economic integration
- the transfer of policies across borders
- the transmission of knowledge
- cultural stability
- the reproduction, relations and discourse of power
- it is a global process, a concept, a revolution and an establishment of the global
market free from socio-political control
This suggests a free society where the invisible interchange of supply and demand
regulates sales and purchases.
MNCs – multinational corporations
A corporate organisation that own/ controls production of goods or services in atleast one
country other than is home country . MNCs see both beneits and furnaces of
globalisation . Globalisation gives businesses access to markets that would have been
diicult to react in the past, access labour at cheap prices.
The good
Globalisation has collapsed the world into a small village . The tremendous increase in
world exports is in line with the increase in irms taking advantage of location -speciic
advantages . Improvements in world exports have contributed to employment creation,
trade-creation, national prosperity and human prosperity.
Globalisation has helped improve life expectancy from 52.5 years in 1960 to 71.2 years in
2013. Almost every country has beneited from medical advances that are stimulated by
globalisation.
The distribution of technology has helped reduce associated costs and has improved
accessibility to state-of-the-art technology by less privileged communities in the world.
Cost reduction and accessibility have transformed the way people communicate and
interact . The advancement of transport technology has made it faster , safer and more
comfortable to travel across global geographies at a relatively cheaper rate.
The concept of location -speciic advantages has helped create sustainable jobs in some
ofshore locations that were previously unattractive for locating production facilities. The
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