globalization chapter 1 international bussines bba 5th uog
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GLOBALIZATION CHAPTER 1 INTERNATIONAL BUSINES BBA 5TH UOGTRANSCRIPT
CHAPTER 1
GLOBALIZATION
Author: Charles w.l.hill
International Business
Any level activity that is carried
across border to earn profit..
Y to do International Business?
(Benefits)
Increase in Profits
Employment opportunities
Foreign Exchange
Split Risk across different Markets
Improvement in Technology
Taxation
Innovations
Cont’d….
Technology
Better utilization of Resources
Political Relations
Hurdles in International
Business
Nationalities of Parties
Law & regulations of different
countries
Political conditions
Risk
Differences in Cultures
Competition
Terrorism etc.
What is Globalization???
Interdependence and interrelation of world economy is basically termed
as “Globalization”
Factors that had led Globalization:
Fall of Barriers of trade
Telecommunication
Transportation
Internet
Globalization Of Markets
• Merging of Historically Distinct National Markets
• Convergence of Consumer taste and Preferences
• Example: Starbucks, KFC, Pepsi
Globalization of Production
• Sourcing of Goods around Globe to take advantage o National Differences in factor of productions.
• Example: Boeing Jet airliner
Global Institutes:
WTO (World Trade Organization)148 nations as member countries up to May,2005.
Responsible for facilitation of multinationals agreements
Promoted low trade barriers
• IMF (International monetary Fund) & World Bank: Came into existence in 1944 by 44 nations
IMF maintain order in international monetary system ; world bank promote economic development
Cont’d….
UN (United Nation)
Oct 24, 1945 by 51 countries
Now 191 member nations
Established to preserve peace through
international cooperation & collective security
UN Charter
Establishes Basic principles of international
relations
Cont’d….
Charter has laid down 4 purposes of UN
Maintain International
Peace & Security
Develop friendly relations among
Nations
Cooperate in solving
International problems &
promote respect for human rights
Harmonizing Actions of Nations
Drivers of Globalization
Declining Trade & Investment Barriers
Role of Technological Change
Microprocessors & Telecommunication
Internet & World Wide Web
Transportation Technology
Global Economy of 21st
Century
Barriers have reduced
Volume of Trade has increased
Investment is growing more than Global output
Privatization, Deregulation, Open Markets etc.
Globalization is not inevitable
Example: Russia
Globalization also brings risk with it
Example: Recession
Globalization Debate
Greater Prosperity
Lower Prices of Goods and Services
Stimulate Economic Growth
Employment opportunities
Raise Income of Consumers
Globalization has its critics also:
Anti-Globalization Protest
Globalization, Jobs and Income
Labor Policies and Environment
National Sovereignty
World’s Poor
Managing in Global
Marketplace
Countries are Different
Range of problems are wider & more Complex
Government Intervention
Currency Exchange Rates