Globalization refers to the increasing integration of economies around the world through trade and financial flows. It involves companies operating on a global scale to produce and market similar products worldwide. While globalization provides opportunities for growth, it also faces criticisms such as promoting cultural imperialism. Multinational corporations play a major role in driving globalization as they expand operations across borders in search of new markets and efficiencies. However, multinationals also encounter challenges abroad and can negatively impact host countries. Regional trading blocs have formed to reduce trade barriers between member nations, but they also divert trade away from low-cost non-member producers and create both winners and losers among participating economies.

1. IB Business & Management Unit 1.9 Globalization: Lesson 1: The Causes & Impacts Pages: 151-163

2. 1. Focus Questions 1. What is globalization? 2. What are the causes and impacts of globalization? 3. What are some indicators of globalization? …

3. Think about it… In business, the competition will bite you if you keep running. If you stand still, they will swallow you. ~ William Knudsen (1879-1948), former president of GM.

4. 2. Overview What is globalization? The integration of the world’s economies in relation to their economics, sociology, and politics. It is an attempt to produce and sell the same products or services in different countries. Why are companies interested in globalization? Is globalization the right move for some companies? What are some indicators of globalization? See Box 1.9a on page 152. … Taken from: http://www.tcnj.edu/~franco6/images/large_globalization_e.bmp

5. 3. Globalization Globalization can also be defined as the growing interdependence of the world’s economies. Whereby national economies join together into a single global economy. With globalization, the political and economical decisions of one country are likely to affect those in other parts of the world, too. MNC will design and market their products to the world. Products are easily recognizable. Same production processes. For example… - - - - - - - - - - - - > … image: http://news.bbc.co.uk/olmedia/1615000/images/_1619221_chinamac330.jpg

7. How many have watched, “Super Size Me”?

8. Some argue that globalization is a form of cultural imperialism.

9. Do you agree or disagree?

11. 1. Focus Questions 1. What are the reasons for the growth of MNCs? 2. What role and impact do MNCs have in the global business environment? …

12. 2a. Multinational Corporations What is a MNC? A business that operates in two or more countries. It is also called a transnational corporation. Can you give examples of some MNC? Coke Dell Samsung LG Hyundai Wendy’s … image: http://mancelovici.files.wordpress.com/2007/06/olympic-games-sponsors.gif

13. 2b. Multinational Corporations So, why become a multinational? For several reasons, such as… …

14. 3. Potential Problems Despite the benefits of expanding overseas, there are certain problems that a MNC will encounter. …

15. 4. MNCs Effect on Host Countries Despite the benefits of expanding overseas, there are certain problems that a MNC will encounter. See page 158-159 of your text. …

16. IB Business & Management Unit 1.9 Globalization: Lesson 3: Regional Trading Blocs Pages: 159-163

17. 1. Focus Questions 1. What are trading blocs and what are their major implications for businesses? …

18. 2a. Regional Trading Blocs RTBs try to… eliminate trade barriers Establish free international trade….see page 159.

19. 2b. Regional Trading Blocs RTB will also… Impose physical barriers to international trade. Tariffs: will increase the price of exports, thus reduce competition. Quotas: limits placed on the volume or value of foreign goods and services. This will limit supply and will have two major effects: 1. It reduces the amount available for sale. 2. It raises prices due to limited supply. …

20. 2c. Major RTB Around the World

21. 2d. Recap Regional Trading Blocs (RTB) and Closer Economic Partnership Agreements (CEPA) aim to: Reduce or eliminate tariffs between its members. Promote trade and investment facilitation. In the end, there will always be winners and losers when joining these RTBs. The winners: Trade creation; when a country switches from buying products at a high cost to buying them from a lower cost country. The losers: Trade diversion; when a country switches from buying products from a low-cost country to buying them from a higher-cost country.

22. The End.