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Unformatted text preview: MOS 020 Study Notes Ali Banfield is AMAZING Chapter One Globalization What is Globalization? Globalization the trend away from distinct national economic units and toward one huge global market The Globalization of Markets Globalization of Markets refers to the merging historically distinct and separate national markets into one huge global marketplace. Falling barriers to cross-border trade have made it easier to sell internationally Standardized products leading to standardized consumer = global market Very significant differences between national markets along many relevant dimensions, including consumer tastes and preferences, distribution channels, culturally embedded value systems, business systems, and legal regulations As firms travel around the world they bring with them their products, operating strategies, marketing strategies, and brand-names, this creates homogeneity across markets The Globalization of Production Refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of productions (such as labour, energy, land, and capital) The Emergence of Global Institutions Multinational treaties govern the global business system GATT / WTO General Agreement on Tariffs and Trade / World Trade Organzition policing the world trading system and making sure nation states adhere to the rules laid down in trade treaties signed by WTO member states, wants to lower trade barriers IMF created in 1944, maintain order on the international monetary system, seen as last resort for nations whose economies are in turmoil, loans come with strings attached: requires nations to adopt specific policies World Bank promote economic development, loan governments of poor nations low-interest rates, for undertaking infrastructure investments United Nations established Oct. 24, 1945, committed to preserving peace through international cooperation and collective security, obligations to the UN Charter: Four purposes; maintain international peace and security, develop friendly relations among nations, to cooperate in solving international problems and in promoting respect got human rights, and to be a centre for harmonizing the actions of nations Drivers of Globalization Two Macro factors that underline the trend towards globalization: 1. Decline in the barriers to the free flow of goods, services, and capital 2. Technological change changes in communication, information processing, and transportations technologies Declining Trade and Investment Barriers International Trade occurs when a firm exports goods and services to consumers in another country Foreign Direct Investment occurs when a firm invests resources in business activities outside its home country The Role of Technological Change Microprocessors and Telecommunications Microprocessor enabled the explosive growth of high-power, low-cost...
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This note was uploaded on 02/27/2011 for the course MOS 020 taught by Professor Hunter during the Spring '08 term at UWO.
- Spring '08
- The Land