Understanding Globalisation

Introduction to Globalisation

• Globalisation describes the increasing interconnectedness of businesses, cultures, and economies worldwide.
• Globalisation drives economic growth, increases competition and enhances cultural exchange.
• Key trends include digital trade growth, international outsourcing, and market integration.
• E-commerce platforms like Amazon provide worldwide access to previously unavailable products.

Globalisation of Markets

• Businesses expand internationally to increase market share.
• Standardisation of products helps meet global consumer demands.
• Companies adapt products for local tastes while maintaining brand identity.
• McDonald’s offers unique menu items based on regional preferences.

Globalisation of Production

• Companies outsource production to different countries for cost efficiency.
• Supply chains are essential for logistics and sourcing materials globally.
• Apple assembles iPhones in China, sources components from South Korea, and designs them in the USA.

Types of Globalisation

• Economic globalisation involves integration through trade and investment.
• Political globalisation involves the influence of international policies and organisations.
• Cultural globalisation involves the spread of ideas, languages, and lifestyles.
• Technological globalisation involves rapid digitalisation and internet penetration.
• Environmental globalisation involves global cooperation on climate change.

Drivers of Globalisation

• Technological advancements like the Internet, AI, and automation drive globalisation.
• Trade liberalisation through reduced tariffs and trade barriers promotes globalisation.
• Growth of multinational corporations (MNCs) drives globalisation.
• Improved transportation and communication enhance globalisation.
• 5G networks enhance real-time business operations across borders.

Capitalism and Globalisation

• Capitalism fuels global expansion through free markets.
• Competition drives innovation and efficiency.
• Tesla is expanding into international markets due to demand for electric vehicles.

Advantages of Globalisation

• Economic growth and foreign investments are advantages of globalisation.
• Innovation through knowledge exchange is an advantage of globalisation.
• Increased market competition leads to better products and lower prices.
• China’s economic growth surged due to global trade and foreign investments.

Disadvantages of Globalisation

• Income inequality, with a wealth gap between developed and developing nations, is a disadvantage.
• Exploitation of labour, with poor working conditions in low-wage countries, is a disadvantage.
• Environmental concerns like overconsumption and pollution are disadvantages of globalization.
• The 2013 Rana Plaza disaster highlighted the dangers of outsourcing manufacturing to low-wage countries.

Key Players in Global Business

• Multinational Corporations (MNCs) operate in multiple countries.
• Entrepreneurs and small businesses benefit from global e-commerce platforms.
• Amazon, Tesla, and small businesses use Etsy to reach international customers.

Globalisation’s Impact on Jobs

• Job creation occurs in developing nations, but job losses occur in developed ones.
• Outsourcing operations happens in countries with lower wages.
• Wage disparity exists between developed and developing nations.
• Many customer service jobs are outsourced to countries like India and the Philippines due to lower wages.

Global Business Thinking

• Corporate Social Responsibility (CSR) involves ethical business practices.
• Sustainable business models include fair trade and eco-friendly initiatives.
• Sustainable supply chains focus on reducing environmental impact.
• Patagonia focuses on sustainable manufacturing to minimize environmental harm.

Role of Governments & International Organisations

• Governments regulate trade policies, balancing domestic and global interests.
• The United Nations (UN) promotes peace and economic development.
• The World Bank & IMF provide financial support to countries.
• The WTO ensures fair global trade practices.
• The World Trade Organization (WTO) resolves trade disputes between countries.

Challenges of Globalisation

• Protectionism involves countries imposing trade barriers.
• Political instability can involve trade wars and conflicts.
• Ethical concerns include child labour and environmental damage.
• The U.S.-China trade war led to increased tariffs and affected global supply chains.

Digital Globalisation and Technology

• Growth of e-commerce and digital businesses.
• Artificial intelligence and big data transforming global markets.
• Cybersecurity risks and protection strategies.
• Companies like Alibaba and Shopify enable businesses to sell globally through digital platforms.

The Future of Globalisation

• Emerging markets are present in Africa, South America, and Southeast Asia.
• Deglobalisation trends include rising nationalism and protectionism.
• There is a sustainability focus on a green economy and eco-friendly global policies.
• Many companies now prioritize sustainable sourcing to reduce their environmental impact.

Developing Skills for the Global Business Environment

• Cross-cultural communication involves understanding business etiquette in different regions.
• Digital literacy involves adapting to global digital trends.
• Adaptability involves building competencies for global career success.
• Learning multiple languages can enhance job opportunities in international business.