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Chapter 1: Globalisation (globalisation of production? (companies can…
Chapter 1: Globalisation
globalisation of markets?
causes?
falling trade barriers & make it easier to sell globally
consumers' taste & preferences are converging on some global norm
firms promote the trend by offering the same basic products worldwide
globalisation of production?
firms source good & services from all over the world
capitalise on national difference in cost of quality of factors of production e.g. land, labour, energy & capital
companies can
lower overall cost structure
improve the quart of functionality of offered product e.g. outsourcing
is an interdependent global economy a good thing?
increased trade ad cross-border investment can
lower prices for good & services
greater economic growth
higher consumer income & more jobs
critics worry that globalisation causes
job losses
environmental degradation
the cultural imperialism of global media and MNEs
countries will specialise in what they do most efficiently and trade for other good = win-win situation
how does the global marketplace affect managers?
managing international businees ≠ domestic business
countries are different
range of problems overseas is wider and more complex
firms have to work within limits imposed by government in trade and investment system
have to convert money (different currencies)