Download - Globalisation 2014
DEFINITION OF GLOBALISATION
Globalization is simply defined as a “process consisting of technological,
economic, political, and cultural dimensions that interconnect individuals, firms,
and governments across national borders.
FACTORS DRIVING GLOBAL BUSINESS
DEVELOPMENT• Global consumers purchasing and spending pattern
Consumer tastes have changed, and consumers are more willing to try foreign
products.The arrival of global satellite television, for example, has exposed consumers
to global advertising. Consumers are more aware of what is available in other
countries, and are keen to give it a try.
Emerging markets in developing countries, especially the ‘Tigers’ of SE Asia eg
Thailand. There has been high growth of incomes in these countries, which makes
large consumer markets with money to spend. Indonesia, for example, whilst still not
particularly rich, has some 350 myn consumers. Both India and China are very poor
countries, but there are small middle classes who are doing very well and have money
to spend. Although these groups are small in the context of the country, the overall
populations are so huge (over 1 byn) that a small middle class adds up to many
millions of consumers.
• Role of World Trade Organization (WTO)
Free Trade. Many barriers to trade have been removed. Some of this has been done
by regional groupings of countries such as the EU (European Union – like
Austria, Belgium, Bulgaria, Croatia etc) . Most of it has been done by the WTO. This
makes trade cheaper and therefore more attractive to business.
• Impact of Rapid Development of New Technology
Technological change, especially in communications technology. For example, UK
businesses and data by satellite to India (taking advantage of the difference in time
zones) where skilled but cheaper data handlers input the data and return it by
satellite for the start of the UK working day.
Apart from that there are also changes/advancement of technology in transportation
industry.
Transport is much cheaper and faster. This is not just aircraft, but also ships. The
development of containerisation in the 1950s was a major breakthrough in goods
handling, and there have been continuing improvements to shipping technology
since then.
• Deregulation of the financial market
Deregulation. From the 1980s onwards (starting in the UK) many rules and
regulations in business were removed, especially rules regarding foreign
ownership. Privatisation also took place, and large areas of business were
now open to purchase and/or take-over. This allowed businesses in one
country to buy those in another. For example, many UK utilities, once
government businesses, are owned by French and US businesses.
IMPACTS OF GLOBALISATION
• Jobs in developing countries vs loss of jobs in developed countries
• Spread of skills in technology
• International cooperation
• Loss of domestic market revenue through tax havens and transfer pricing
TAX HAVEN
WATCH VIDEO – "THE GLOBAL MIND: THE
FUTURE OF GLOBALIZATION AND ITS IMPACT
ON OUR WORLD"
https://www.youtube.com/watch?v=SG8DCgjkGzY
BENEFITS OF HOME GROWN/DEVELOPED
PRODUCTS
It's good for your family and friends
There is a direct correlation between consumer purchasing behaviour and
employment, local economic development and prosperity. When you buy Australian-
made and grown products, you can be sure you are keeping your family members and
friends employed
It's good for Australia
Research published by the Industry Capability Network shows that for every $1 million
of new or retained manufacturing business in Australia, the following effects flow
through the economy:
$333,900 worth of tax revenue generated
$985,000 worth of value-added generated
$95,000 worth of welfare benefits saved
10 full-time jobs created
Example :
Australia provides opportunities in biomedical, diagnostics, medical devices, and agri-
biotech
broadband; energy grids: port productivity and land transport; public transport; and
water supply.
consumer goods sector, predominately made up of the clothing and fashion; cosmetics
and toiletries; and jewellery industries is one of Australia's most exciting and dynamic
areas.
HOME GROWN/DEVELOPED PRODUCTS
Please visit this site for more information on the
Australian specialty :
http://www.austrade.gov.au/Buy/Australian-Industry-
Capability/Consumer-Goods/default.aspx
ROLE OF ETHICS IN GLOBAL BUSINESS
PRACTICES • Environmental harm
• – Dumping of illegal products -Somalia and Malaysia ( water pollution ) –
• e:g : Toxic waste dump site ( youtube )
• -Ecological sustainability – carbon footprints – e:g coca- cola , IBM, Nike
• -Price dumping
• Moving jobs offshore
• Use of child labor
- China & India : low wages paid
- poor working environment
- suicide
- watch video on – exploited labor (Foxconn) – Youtube
**** Also watch on the “Dark side of Globalization “( Youtube)