UNIT 1 Globalisation 3

Topics: International trade, World Trade Organization / Pages: 9 (2271 words) / Published: Mar 3rd, 2015
UNIT 1 GLOBALISATION

Unit Structure

1.0 Overview
1.1 Learning Objectives
1.2 Globalisation
1.3 Drivers of Globalisation
1.4 Advantages of Globalisation
1.5 Disadvantages of Globalisation
1.6 Exercises
1.7 Summary
1.8 Suggested Readings

1.0 OVERVIEW

Over the last thirty years, the environment in which international business operates has become subject to the forces of globalization and increasing world integration. The increase in world trade, and its globalisation, together with the trans-nationalism of production, with components drawn from a variety of sources and brought together ‘just in time’ to meet customer demand has profoundly altered the ways and the directions in which goods are traded. Furthermore, the convergence of political ideologies towards capitalism and the adoption of more liberal trade policies by counties have entailed a greater degree of global competition; the latter situation has brought significant changes to the location configuration of products where very often countries and multinationals are obliged to prioritize cost considerations to remain competitive.

1.1 LEARNING OBJECTIVES

By the end of this Unit, you should be able to understand and grasp the following:

1. the concept of Globalisation;
2. the main drivers of Globalisation;
3. the benefits and costs of a global economy.

1.2 GLOBALISATION

The environment in which international business operates has become subject to the forces of globalisation and increasing world integration. One might even say that globalisation is the buzzword of economics today. There are many varying definitions of globalisation, some including cultural and political aspects but for the purpose of this manual, it is best to focus on the economic aspects of it. Globalisation, it is argued, is a shift towards a more integrated and interdependent world economy.

Furthermore, at a very simple level, one may distinguish between two broad aspects of globalisation.

1.2.1 Globalisation of Markets

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