Mid-term review - Mid-Term Review 1. What is Globalization?...

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Mid-Term Review 1. What is Globalization? What forces are driving globalization?: A shift towards a more integrated and interdependent world economy. Globalization of Markets: the merging of historically distinct and separate national markets into one huge global market place. Globalization of Production: Sourcing goods and services from locations around the globe to take advantage of national differences in the cost and quality of various factors of production. Technology (Communications, computers, internet, transportation): Telecommunication, transportation, the internet have all contributed to the progression of global trade. The Microprocessor, enabled explosive growth of high-power, low-cost computing, increasing the amount of information that can be processed by individuals and firms. Microprocessor made way towards the development of global communication, satellite, optical fiber, wireless, the internet, etc which all rely on the processor to encode, transmit, and decode the information. Moore's Law = the price of microprocessor declines while the power inclines and power doubles and cost of production falls in half every 18 months. The internet and world wide web hit billions of users, backbone of global economy. Makes it easier for buyers and sellers to intermingle. Transportation shrunk the globe in terms of travel time. Lowered cost of shipments by revolutionizing containerization, and made it more economical to ship goods around the globe. Political (Collapse of USSR, Democracy, Market economies): Communist countries collapsing between 1989-1991. Soviet Union replaced by 15 independent republics. Czechoslovakia divided itself in two states. Risky for western to do business with countries like Russia, where the state has more involvement than it should. a lot of countries transitioning into a more free market trade even former communist countries. Collapse of communism in Eastern Europe, which has created enormous long-run opportunities for international business. In addition, the move toward free market economies in China and Latin America is creating opportunities and threats for Western international businesses. Globalization arguments against are: job loss, pressure of lower pay, environmental degradation, and cultural imperialism of global media, working conditions, and national sovereignty. GATT (General Agreement on Tariffs and Trade) : Created by voluntary agreement between individual nation-states and their functions are enshrined in international treaties. GATT is primarily responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties signed by WTO member states. International treaty that committed signatories to lowering barriers to the free flow of goods across national borders; lead to WTO. WTO (World Trade Organization):
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This note was uploaded on 09/08/2010 for the course BUS 187 at San Jose State University .

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Mid-term review - Mid-Term Review 1. What is Globalization?...

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