Globalization of Markets Overview

<p>the end of World War II</p> Signup and view all the answers

<p>It reduced barriers to international trade and investment.</p> Signup and view all the answers

<p>the enormous growth of cross-border trade and investment</p> Signup and view all the answers

<p>World Trade Organization</p> Signup and view all the answers

<p>Japan</p> Signup and view all the answers

<p>facilitated the globalization of the service sector in such areas as banking and retailing</p> Signup and view all the answers

<p>individual firms respond to the challenges and new advantages that it brings</p> Signup and view all the answers

<p>integration of world financial markets</p> Signup and view all the answers

<p>offshoring and the flight of jobs</p> Signup and view all the answers

<p>approaching internationalization from a reactive standpoint</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>The Bretton Woods Conference of 1947 led to the General Agreement on Tariffs and Trade (GATT) and a series of negotiations that reduced barriers to international trade and investment. This paved the way for increased global trade, stimulating economic growth, modernization, and higher living standards. The GATT eventually became the World Trade Organization (WTO). The WTO aims to regulate and ensure fairness and efficiency in global trade and investment. Multilateral frameworks like GATT and WTO have facilitated international cooperation in trade and investment, giving birth to other critical institutions like the International Monetary Fund and the World Bank. These organizations and the subsequent trade agreements have reduced tariffs and other trade barriers, allowing companies to operate globally and leading to the widespread integration of national economies.</p> Signup and view all the answers

<p>The fourth phase of globalization began in the early 1980s, characterized by rapid growth in cross-border trade and investment. This phase unfolded alongside the development of personal computers, the internet, and web browsers. Importantly, it was also marked by the collapse of the Soviet Union and the market liberalization of Central and Eastern Europe, significantly impacting global trade networks. Contagion refers to the tendency of a financial or monetary crisis in one country to quickly spread to others, driven by the increasing interconnectedness of global economies. A prime example is the 2008 global financial crisis, which began in the US and subsequently spread to economies around the world. This demonstrates the interconnected nature of global markets and the potential for rapid economic fallout in the event of a significant crisis.</p> Signup and view all the answers

<p>Free-market reforms in China and the former Soviet Union</p> Signup and view all the answers

<p>engage in foreign currency transactions</p> Signup and view all the answers

<p>contributes to firms' abilities to develop and operate world-scale production and marketing</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>The adoption of free markets in numerous countries around the world has significantly contributed to market globalization. This has included the transition of former command economies, such as in China and the former Soviet Union, to market-based systems. Furthermore, many Asian economies, including India, Indonesia, Malaysia, and South Korea, have adopted free-market principles and implemented economic reforms. Additionally, Eastern European countries have embraced market-oriented reforms, promoting increased trade and investment. These developments have helped to integrate a significant portion of the world into the global marketplace, expanding opportunities for businesses and fostering increased trade and investment.</p> Signup and view all the answers

<p>Industrialization refers to a shift in an economy from being primarily focused on agriculture and low-value commodity production towards advanced manufacturing and production of higher-value goods, such as electronics, computers, and aircraft. This transformation brings about economic development by contributing to higher productivity, increased income levels, and improved living standards. This is achieved by creating a more skilled labor force, attracting foreign investment, and promoting technological innovation.</p> Signup and view all the answers

<p>Internationalization of a firm's value chain refers to the process where businesses expand and organize their value-adding activities across multiple countries, often by relocating parts of their operations, sourcing, manufacturing, or distribution, to different regions. The concept of a value chain encapsulates a firm's entire process of creating value, from research and development, to sourcing and manufacturing, to marketing and distribution. Internationalization allows firms to gain cost advantages, tap into specific skills and resources in different locations, and optimize their global operations. This can include offshoring and outsourcing, where production or services are transferred to other countries to reduce costs and improve efficiency.</p> Signup and view all the answers

<p>It provides a means for globalization to happen.</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>False</p> Signup and view all the answers

<p>Technological advancements have been a driving force behind globalization, empowering businesses to operate more efficiently and effectively on a global scale. Here are key areas where technology has significantly impacted business:</p> <ol> <li>Information Technology: The rapid decrease in computer processing costs, coupled with the rise of internet-based systems and software, has led to significant productivity gains and new business opportunities for firms. These advances have enabled small businesses to compete with larger corporations, while allowing companies to design and produce more customized products tailored to specific market niches.</li> <li>Communications: The internet, social media, and mobile technologies have drastically reduced communication costs and enabled rapid information sharing. Intranets, extranets, and e-commerce have streamlined operations and allowed global connectivity across borders. Companies are increasingly able to access and communicate with customers and suppliers in any part of the world.</li> <li>Manufacturing: Computer-aided design (CAD) and robotics have revolutionized manufacturing processes. These advancements enable lower production costs, increased efficiency, and faster turnaround times, allowing for flexible and cost-effective manufacturing, even in smaller production runs. This has empowered businesses to target specific markets with specialized products, while competing with global manufacturers.</li> <li>Transportation: Significant advancements in transportation technology, such as fuel-efficient aircraft and container ships, have greatly reduced transportation costs, expedited the delivery of goods, and expanded global market access. Improvements in logistics and supply chain management have streamlined transportation processes, enabling companies to optimize their global operations and reach customers more efficiently.</li> </ol> Signup and view all the answers

<p>driver and consequence of firm-level internationalization</p> Signup and view all the answers

<p>the sequence of value-adding activities performed by a firm in the course of developing, producing, marketing, and servicing a product</p> Signup and view all the answers

<p>reduce trade and investment barriers</p> Signup and view all the answers

<p>the World Trade Organization</p> Signup and view all the answers

<p>creating supranational institutions to further reduce trade barriers</p> Signup and view all the answers

<p>regional economic integration blocs</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>value chain</p> Signup and view all the answers

<p>Globalization drives firms to relocate key value-adding activities to the most advantageous locations around the world.</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>offshoring</p> Signup and view all the answers

<p>local nationalism</p> Signup and view all the answers

<p>True</p> Signup and view all the answers

<p>Sovereignty refers to a nation's independent authority to govern its own affairs and make decisions within its borders without interference from other countries. This includes control over its economy, social structure, and political system. Globalization can pose challenges to national sovereignty, particularly as multinational corporations, international organizations, and global financial markets exert influence and impact on domestic economic and political decisions. However, it is crucial for governments to maintain their regulatory power, protect their interests, and ensure equitable global agreements. While globalization can present challenges to national sovereignty, it can also provide opportunities for economic growth and social progress when managed effectively.</p> Signup and view all the answers

<p>Globalization exposes people to international trends, brands, and cultural influences, often leading to shifts in consumer preferences, values, and lifestyles. This can lead to the adoption of global products and services, cultural homogenization, and even the perceived dominance of some cultures over others (cultural imperialism). However, local nationalism can act as a counterforce, reinforcing unique national identities and cultural practices. As societies become more interconnected through globalization, it is imperative for governments to protect national interests and ensure that cultural diversity and heritage are preserved.</p> Signup and view all the answers