Business in Globalised World.pdf - Chapter 4 Business in a...

This preview shows page 1 - 2 out of 3 pages.

Chapter 4: Business in a globalized world Globalization refers to the increasing movement of goods, services, and capital across national borders. Globalization is a process, that is, an ongoing series of interrelated events. International trade and financial flows integrate the world economy, leading to the spread of technology, culture, and politics. Firms can enter and compete in the global marketplace in several ways. Many companies first build a successful business in their home country, and then export their products or services to buyers in other countries. In other words, they develop global market channels for their products. Other firms begin in their home country, but realize that they can cut costs by locating some or all of their global operations in another country. This decision leads to establishing manufacturing plants or service operations abroad. These three strategies of globalization can be summarized in three words: sell, make, and source. Today, many companies have all three elements of global business—market channels, manufacturing operations, and supply chains. Foreign direct investment (FDI) occurs when a company, individual, or fund invests money in another country, for example, by buying shares of stock in or loaning money to a foreign firm. Global commerce is carried out in the context of a set of important international financial and trade institutions (IFTIs). The most important of these are the World Bank, the International Monetary Fund, and

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture