Globalization from a Business Perspective Prof. Anne Lawrence

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Globalization from a Business PerspectiveProf.
Anne Lawrence
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Globalization from a Business Perspective
From a business perspective, globalization may
be viewed as the flow of goods, services, and
capital across national borders.
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Globalization from a Business Perspective

• Goods are things that are manufactured, grown on
  a farm, or mined or pumped out of the ground.
• Services are intangible things that we use but
  cant hold in our hand.
• Capital is money that is invested, in this case
  in another nations economy.

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Globalization from a Business Perspective
Globalization is a process a series of
interrelated events. It can also be considered
a system.
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Globalization from a Business Perspective
Globalization can be measured as the share of the
worlds economic output that is traded
externally, among countries, rather than
internally, within countries.
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Globalization from a Business Perspective
Since 1960, the pace of globalization has greatly
accelerated, as shown by the next slide.
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Globalization from a Business Perspective
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Globalization from a Business Perspective

• Why has globalization accelerated?
• Improved communications
• Improved transportation systems
• The rise of major transnational corporations

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Globalization from a Business Perspective

• Why has globalization accelerated?
• Social and political reforms
• The rise of international financial and trade
  institutions

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Globalization from a Business Perspective
A transnational corporation is a company that
does business in more than one country.
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Globalization from a Business Perspective

• 65,000 transnational corporations operate in the
  modern global economy.
• These corporations, in turn, have about 850,000
  affiliates suppliers, subcontractors,
  retailers, and others with whom they have a
  business relationship.

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Globalization from a Business Perspective
The worlds top ten non-financial TNCs, ranked
by foreign assets, are Vodafone General
Electric ExxonMobil Vivendi Universal General
Motors Royal Dutch/Shell BP Toyota
Motor Telefonica Fiat
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Globalization from a Business Perspective

• Firms can enter and compete in the global
  marketplace in several ways.
• These can be summarized by the words
• Sell
• Make
• Buy

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Globalization from a Business Perspective
Today, many companies have all three elements
of global business market channels,
manufacturing operations, and supply chains.
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Globalization from a Business Perspective

• Arguments FOR Globalization
• Globalization.
• Increases economic productivity
• Reduces prices for consumers

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Globalization from a Business Perspective

• Globalization.
• Gives developing countries access to foreign
  investment funds to support economic development
• Transfers technology
• Spreads democracy and freedom, and reduces
  military conflict

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Globalization from a Business Perspective

• Arguments AGAINST Globalization
• Globalization.
• Causes job insecurity
• Weakens environmental and labor standards

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Globalization from a Business Perspective

• Globalization.
• Prevents individual nations from adopting
  policies promoting environmental or social
  objectives
• Undermines cultural, linguistic, and religious
  diversity
• Is just as compatible with despotism as it is
  with freedom

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Globalization from a Business Perspective
What are your opinions about globalization? --gt
A survey of worldviews developed by Prof. Thomas
Gladwin of the University of Michigan shows how
your feelings about globalization compare with
others.