Bm Chapter 1.9 Globalization

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IB Business and Management (Standard Level)
All material taken from the IB Business and Management Textbook:
"Business and Management", Paul Hoang, IBID Press, Victoria, 2007

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Bm Chapter 1.9 Globalization

  1. 1. IB Business & Management<br />Unit 1.9 <br />Globalization:<br />Lesson 1: The Causes & Impacts<br />Pages: 151-163<br />
  2. 2. 1. Focus Questions<br />1. What is globalization?<br />2. What are the causes and impacts of globalization?<br />3. What are some indicators of globalization?<br />…<br />
  3. 3. Think about it…<br />In business, the competition will bite you if you keep running. If you stand still, they will swallow you.<br />~ William Knudsen (1879-1948), former president of GM.<br />
  4. 4. 2. Overview<br />What is globalization?<br />The integration of the world’s economies in relation to their economics, sociology, and politics.<br />It is an attempt to produce and sell the same products or services in different countries.<br />Why are companies interested in globalization?<br />Is globalization the right move for some companies?<br />What are some indicators of globalization?<br />See Box 1.9a on page 152.<br />…<br />Taken from: http://www.tcnj.edu/~franco6/images/large_globalization_e.bmp<br />
  5. 5. 3. Globalization<br />Globalization can also be defined as the growing interdependence of the world’s economies.<br />Whereby national economies join together into a single global economy.<br />With globalization, the political and economical decisions of one country are likely to affect those in other parts of the world, too.<br />MNC will design and market their products to the world.<br />Products are easily recognizable.<br />Same production processes.<br />For example… - - - - - - - - - - - - &gt;<br />…<br />image: http://news.bbc.co.uk/olmedia/1615000/images/_1619221_chinamac330.jpg<br />
  6. 6. 5. The Effects of Globalization on Business Activity<br /><ul><li> There are many who criticize globalization.
  7. 7. How many have watched, “Super Size Me”?
  8. 8. Some argue that globalization is a form of cultural imperialism.
  9. 9. Do you agree or disagree?
  10. 10. For a business, globalization provides both opportunities and threats.</li></li></ul><li>IB Business & Management<br />Unit 1.9 <br />Globalization: <br />Lesson 2 : Multinational Corporations<br />Pages: 156-159<br />
  11. 11. 1. Focus Questions<br />1. What are the reasons for the growth of MNCs?<br />2. What role and impact do MNCs have in the global business environment?<br />…<br />
  12. 12. 2a. Multinational Corporations<br />What is a MNC?<br />A business that operates in two or more countries.<br />It is also called a transnational corporation.<br />Can you give examples of some MNC?<br />Coke<br />Dell<br />Samsung<br />LG<br />Hyundai<br />Wendy’s<br />…<br />image: http://mancelovici.files.wordpress.com/2007/06/olympic-games-sponsors.gif<br />
  13. 13. 2b. Multinational Corporations<br />So, why become a multinational?<br />For several reasons, such as…<br />…<br />
  14. 14. 3. Potential Problems<br />Despite the benefits of expanding overseas, there are certain problems that a MNC will encounter.<br />…<br />
  15. 15. 4. MNCs Effect on Host Countries<br />Despite the benefits of expanding overseas, there are certain problems that a MNC will encounter.<br />See page 158-159 of your text.<br />…<br />
  16. 16. IB Business & Management<br />Unit 1.9 <br />Globalization: <br />Lesson 3: Regional Trading Blocs<br />Pages: 159-163<br />
  17. 17. 1. Focus Questions<br />1. What are trading blocs and what are their major implications for businesses? …<br />
  18. 18. 2a. Regional Trading Blocs<br />RTBs try to…<br />eliminate trade barriers<br />Establish free international trade….see page 159.<br />
  19. 19. 2b. Regional Trading Blocs<br />RTB will also…<br />Impose physical barriers to international trade.<br />Tariffs: will increase the price of exports, thus reduce competition.<br />Quotas: limits placed on the volume or value of foreign goods and services.<br />This will limit supply and will have two major effects:<br />1. It reduces the amount available for sale.<br />2. It raises prices due to limited supply.<br />…<br />
  20. 20. 2c. Major RTB Around the World<br />
  21. 21. 2d. Recap<br />Regional Trading Blocs (RTB) and Closer Economic Partnership Agreements (CEPA) aim to:<br />Reduce or eliminate tariffs between its members.<br />Promote trade and investment facilitation.<br />In the end, there will always be winners and losers when joining these RTBs.<br />The winners: <br />Trade creation; when a country switches from buying products at a high cost to buying them from a lower cost country.<br />The losers:<br />Trade diversion; when a country switches from buying products from a low-cost country to buying them from a higher-cost country.<br />
  22. 22. The End.<br />

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