Globalisation
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Globalisation

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Globalisation

Globalisation

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Globalisation Globalisation Presentation Transcript

  • Globalisation and Multinational Business
  • Globalisation: Setting the Scene
    • Current issues in the global economy
    • Defining globalisation
      • global economic interdependence
      • implications for business
    • What is driving globalisation?
      • market drivers
      • cost drivers
      • government drivers
      • competitive drivers
  • The drivers of globalisation
  • The drivers of globalisation
  • The drivers of globalisation
  • The drivers of globalisation
  • The drivers of globalisation
  • The drivers of globalisation
  • Globalisation: Setting the Scene
    • Current issues in the global economy
    • Defining globalisation
      • global economic interdependence
      • implications for business
    • What is driving globalisation?
      • market drivers
      • cost drivers
      • government drivers
      • competitive drivers
    • Globalisation: the good and the bad
  • Multinational Corporations
    • Statistics on growth and size of MNCs
      • the comparative size of MNCs and countries' GDP
  • Comparison of the 10 largest multinational corporations (by gross revenue) and selected countries (by GDP): 2002
  • Multinational Corporations
    • Statistics on growth and size of MNCs
      • the comparative size of MNCs and countries' GDP
      • foreign direct investment (FDI) inflows
  • FDI inflows ($ millions)
  • FDI inflows ($ millions)
  • FDI inflows ($ millions)
  • FDI inflows ($ millions)
  • FDI inflows FDI as % of gross fixed capital formation
  • FDI as % of gross fixed capital formation FDI inflows
  • FDI as % of gross fixed capital formation FDI inflows
  • Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
      • production locations
      • ownership patterns
      • organisational structure
  • Why do Businesses go Multinational?
    • Categories of multinational organisation
      • horizontally integrated
      • vertically integrated
      • conglomerate
    • Advantages to firms
      • r eductions in costs
        • international differences in factor prices
        • international differences in factor productivity
        • low-cost access to local markets
        • spreading overheads
  • Why do Businesses go Multinational?
    • Advantages to firms (cont.)
      • government support in host countries
        • lower taxes
        • subsidies
        • provision of infrastructure
      • increased demand
      • spreading risks
      • can exploit advantages over local firms
        • ownership of superior technology
        • entrepreneurial and managerial skills
        • R&D capacity
      • access to local technology
  • Why do Businesses go Multinational?
    • The product life cycle and the MNC
      • the launch phase
      • the growth phase
      • maturity
      • late maturity and decline
    • Problems facing multinationals
      • language barriers
      • selling and marketing
      • relations with host governments
      • relationships between subsidiaries
  • MNC Investment and the Host State
    • Advantages of MNC investment
      • employment
      • balance of payments
      • technology transfer
      • tax revenues
    • Disadvantages
      • uncertainty
      • power and control by the MNC over the host
      • transfer pricing
      • the environment
  • MNCs and Developing Countries
    • The scale of MNC investment in developing countries
    • Advantages to host country
      • the saving gap
        • the importance of development finance
        • the contribution of saving to growth
      • the foreign exchange gap
      • public finance gap
      • skills and technology gaps
  • MNCs and Developing Countries
    • Disadvantages to host country
      • MNCs may drive local firms out of business
      • limited demand for local components
      • repatriation of profits
      • transfer pricing and effects on tax revenues
        • competition between developing countries to attract MNCs
      • distorting the whole pattern of development
        • increasing gap between rich and poor
        • introducing consumerist values
    • What can developing countries do?
  • Globalisation and Multinational Corporations
  • Multinational Corporations
    • Diversity among MNCs
      • size
        • the comparative size of MNCs and countries' GDP
  • Comparison of the 10 largest multinational corporations (by gross revenue) and selected countries (by GDP): 2002
  • Comparison of the 10 largest multinational corporations (by gross revenue) and selected countries (by GDP): 2002
  • Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
  • Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
  • Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
      • production locations
  • Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
      • production locations
      • ownership patterns
  • Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
      • production locations
      • ownership patterns
      • organisational structure
  • Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
      • production locations
      • ownership patterns
      • organisational structure
    • Trends in multinational investment
  • Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
      • production locations
      • ownership patterns
      • organisational structure
    • Trends in multinational investment
      • the growth and geography of FDI
  • FDI inflows (% of gross fixed capital formation) FDI as % of gross fixed capital formation
  • FDI inflows (% of gross fixed capital formation) FDI as % of gross fixed capital formation Advanced countries
  • FDI inflows (% of gross fixed capital formation) FDI as % of gross fixed capital formation Advanced countries Developing countries
  • Multinational Corporations
    • Diversity among MNCs
      • size
      • the nature of the business
      • overseas business relative to total business
      • production locations
      • ownership patterns
      • organisational structure
    • Trends in multinational investment
      • the growth and geography of FDI
      • FDI and the UK
  • Direct investment into and out of the UK
  • Direct investment into and out of the UK Inward investment
  • Direct investment into and out of the UK Outward investment Inward investment
    • Types of multinational expansion
      • horizontally integrated multinational
      • vertically integrated multinational
      • conglomerate
    • Going global to reduce costs
      • international differences in input prices
      • international differences in productivity
        • labour skills
        • entrepreneurial and managerial skills
        • learning by doing
      • low-cost access to local markets
      • economies of scale
      • taking advantage of government policies
    Business Strategy in a Global Economy
    • Going global to access new markets
      • increased demand
      • spreading risks
      • can exploit advantages over local firms
        • ownership of superior technology
        • entrepreneurial and managerial skills
        • R&D capacity
      • access to local technology
      • learning from experience in diverse markets
    Business Strategy in a Global Economy
    • The product life cycle and the MNC
      • the launch phase
        • multinational spread likely to be limited
      • the growth phase
        • MNC likely to shift production abroad in order to retain cost competitiveness
      • maturity
        • MNC increasingly seeks markets abroad as growth in home market slows
      • late maturity and decline
        • MNC increasingly seeks both markets and ever lower cost production abroad
    Business Strategy in a Global Economy
    • Problems facing multinationals
      • language barriers
      • selling and marketing
        • cultural issues
      • relations with host governments
      • relationships between subsidiaries
        • possible diseconomies of scale
        • easier if subsidiaries are run independently
    • The global strategy trade-off
      • economies of scale of standardisation or higher costs of customisation?
        • determinants of trade-off
    Problems Facing Multinationals
  • MNC Investment and the Host State
    • Advantages of MNC investment
      • employment
      • balance of payments
      • technology transfer
      • tax revenues
    • Disadvantages
      • uncertainty
      • power and control by the MNC over the host
      • transfer pricing
      • the environment
  • Is Globalisation a 'Good Thing'?
    • The benefits of globalisation
      • benefits of trade
      • benefits of increased FDI
      • competition reduces costs and encourages innovation
      • faster spread of technology
      • political and social ties
    • The costs
      • can exacerbate inequality
      • erodes national cultures
      • environmental costs
      • domination by MNCs