2. Globalization
1. Globalization is the accelerated interdependence of economic
and business activities across national boundaries.
2. Globalization influences the availability and pricing of products
and services around the world, while often blurring their
source and identity.
3. Globalization affects your career opportunities and the skills
you will need to be successful.
3. • Globalization can be defined as a process of rapid economic,
cultural, and institutional integration among countries
• This unification is driven by the liberalization of trade,
investment and capital flow, technological advances, and
pressures for assimilation towards international standards
• Globalization makes the world more accessible to everyone
4. Types of Globalization
• Economic: countries that trade with many others and have few
trade barriers are economically globalized
• Social: a measure of how easily information and ideas pass
between people in their own country and between different
countries (includes access to internet and social media
networks)
• Political: the amount of political co-operation there is between
countries
5. Determining Factors of Globalization
• Borders between countries are getting thinner
• Ease of Disseminating Information
• Trading Activities Are Expanding
• Culture Exchange
• Concept Change
• Market and Production
• Increased Interaction
6. Causes of Globalization
• Trade liberalization
• Improvement in technology
• Reduced cost/improvement of communications and
transportation
• The Role of International Institutions
• Dependence on Other Countries
• Freedom of the Press or Media
• Deregulation of financial market
• Increased significance of TNCs (transnational corporations)
7. Trade Liberalization
• Trade liberalization refers to a reduction of trade barriers this
will open up worldwide markets
• Trade barriers have fallen since the second World War
• New organizations were formed to increased integration GATT
(General Agreement on Tariffs and Trade from 1995)
8. Improvements in Technology
• Improved technology makes it easier to communicate and share
information around the world
• The most important development in the recent years is the
internet
9. Reduced Cost and Improvement of
Communication and Transportation
• Fall in the real cost transporting goods has allowed cheaper
importation and exportation of goods
• Decline in the cost of communications has also helped this
• Improvement in transportation have also allowed firms to split
up the production process to cash in on varying cost condition
in different parts of the world
• This has helped to facilitate the growth of TNCs
10. Deregulation of financial markets
• There have been moves towards removing restrictions on the
movement of financial capital between countries
• Many countries have removed capital controls – made it easier for
firms to operate globally
• Reinforced by developments in technology that enable financial
transactions to be undertaken more quickly and efficiently, such as
internet
• Financial markets have increased globalization due to their being set
up in various countries
• They allow for more interface communication between different parts
of the world over trade of financial assets
11. Increased Significance of TNCs
• After the Second World War more economic power was shifted
to corporations- accelerated growth
• TNCs have grown even further due to favorable corporation tax
rates in many countries and tax breaks, as TNCs supposedly
bring in more jobs
• TNCs partake in foreign direct investment, which increases the
integration of economies
• Many TNCs want to gain entry to, for example the EU due to its
single market, and China due to its large and growing market
12. Effects of Globalization
• Globalization causes exchange of technology
• Globalization helps in knowledge and information transfer across the
globe
• Globalization has led to increase in investment levels and rise in
opportunities
• Globalization has led to vast multinational and multicultural
management
• Globalization leads to procurement and outsourcing. Accenture
provides procurement and outsourcing services includes sourcing,
demand management, invoice processing, travel and expense
processing, contract administration and many more