ADMS 1000 Lecture 6: Week 6
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A process involving the integration of world economies facilitated by bodies such as nafta, eu, apec, asean, etc. Free movement of goods/services, capital and labour is critical to globalization. Increased cross border transactions, fdi & economic interdependence. Contractual agreements and strategic alliances: outsourcing, licensing/franchising, marketing/distribution agreements. Joint ventures: wholly-owned subsidiaries (greenfield ventures or acquisitions) Indicates that the nationality of the organization is unclear. There is no allegiance to a particular country or location: e. g. nestle, coca cola, mcdonalds. Financial, technological, human capital are easily transferred between countries. Benefits: economic development (e. g. creates employment, brings management expertise, introduces new technology & relevant training, encourages international trade, unites different countries and cultures. Threats: no allegiance to host country, mobile profits, power held in home country (e. g. r & d investments, difficult to control. The purchase, sale or exchange of goods or services across countries.