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Lecture 6

MGTA05H3 Lecture Notes - Lecture 6: Outsourcing


Department
Management (MGT)
Course Code
MGTA05H3
Professor
H Laurence
Lecture
6

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International Business: Part Two
What is Globalization
Financial Markets
Financial markets are much larger and more integrated
Financial markets are more complex and volatile
Financial markets do not follow product markets, but have their own logic
Speculation in finance
What is Globalization
Financial Markets and Risk
Governments bail out failing businesses to save local jobs
Risk is then spread to taxpayers
Benefits remain with owners
What is Globalization
New patterns of business
Worldwide coordination, with production in lower cost jurisdictions
Outsourcing to lower cost centres
Networked economy
International Business I
Basis of Globalization
What is Globalization
New patterns of culture
Worldwide spread of products, and especially of brands, makes local
cultures more cosmopolitan
But strong resistance to this trend, with militant local cultures
International Business I
Basis of Globalization
Key Facilitators of Globalization
Information technology
Modern shipping
Stability and capitalism in developing areas
Need for new ways to profit given the economic situation in the developed world
Globalization – a Short History
Post-war boom
Growing consumer markets
Labour peace
Government providing increased welfare for citizens
Then problems began to arise
Inflation rose dramatically
Expansion of wages and benefits eroded profits
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