EXAM PREP ADMS:
WHAT IS GLOBALIZATION?
The business world: highlights the global context. Involving many more player than local
business and its domestic market.
It has many STAKEHOLDERS, incl. domestic, foreign competitors, workers, industries,
governments, national cultures and economies.
Trade agreements and global arrangements determine how business is conducted.
Globalization is a process involving the integration of world economics.
NAFTA – North American trade agreement – is a FREE TRADE BLOC incl. Canada, US,
Mexico. EUROPEAN UNION – 25 countries. ASIAN PACIFIC ECONOMIC
COOPERATION – 21 nations forming free zone trade in North Pacific.
Globalization is a process involving the integration of world markets.
Whether it’s McDonald’s, Sony, gap or Nike – all marketing their goods worldwide.
Production is now global affair. Business will set up where it is least costly.
Cross border transactions among people, assets, goods and services.
Globalization: Growth in direct foreign investment in regions around the world.
Shift towards economic interdependence: The process of generating one, single, world
economic system or a global economy.
SOURCES ENCOURAGING GLOBAL BUSINESS ACTIVITY:
Pull factors: potential for sales growth. Obtaining needed resources. i.e., US BASED
specialty coffee chain Starbucks corp. began expanding in Europe – Vienna. Avon transferred
its approach globally to over 20 markets i.e. China, brazil, south Africa and Mexico.
Resources: i.e. textile company imports its raw material from foreign supplier bcos of lack of
it locally. To locate less expensive energy resources Japanese businesses have located in
china, Mexico and Taiwan.
Push factors: the force of competition. Shift toward democracy. Reduction in trade
barriers. Improvement in technology. (C.D.TB. T). Business being PUSHED into
becoming a global business for the simple fact it’s being forced to compete with a foreign