LILI'S REVIEWER BAC6.docx

**REVIEWER BAC6 (PRELIM)** **GLOBALIZATION**: widening and deepening of interdependent relationships among nations by reducing barriers to the international movement of goods, services, capital, technology, and people, thereby enhancing global economic integration and expanding access to diverse re...

**REVIEWER BAC6 (PRELIM)** **GLOBALIZATION**: widening and deepening of interdependent relationships among nations by reducing barriers to the international movement of goods, services, capital, technology, and people, thereby enhancing global economic integration and expanding access to diverse resources and markets. **GLOBAL BUSINESS:** a company that operates facilities (such as factories and distribution centers) in many countries around the world. **INTERNATIONAL LAWS **- in the form of legal agreements between countries---determines how earnings are taxed by all jurisdictions. **WHY COMPANIES ENGAGE IN IB?** **SALES EXPANSION** - increases the potential sales and potential profits. **RESOURCE ACQUISITION** - may give companies: lower costs, new or better products, additional operating knowledge. **RISK REDUCTION** - may reduce operating risk by smoothing sales and profits, preventing competitors from gaining advantages **IB OPERATING MODES** **Merchandise Exports and Imports:** most popular IB modes among smaller companies. These involve tangible goods sent out of (exports) and brought into (imports) a country, commonly used by smaller companies for international business. **Service Exports and Imports:** These involve intangible services and are referred to as \"invisibles.\" The provider and receiver of payment are involved in service exports, while the recipient and payer are involved in service imports. **Turnkey operations:** construction projects performed under contract and transferred to owners when they're operational. **Management contracts:** arrangements in which they provide personnel to perform management functions for another. **Franchising: **a contract in which a company assists another on a continuous basis and allows use of its trademark. **Dividends and interest:** from foreign investments are also service exports and imports because they represent the use of assets (capital). **Foreign investment: **means ownership of foreign property in exchange for a financial return, such as interest and dividends, **TWO FORMS OF INVESTMENT** **a. Direct Investments** - **In foreign direct investment (FDI),** investor takes a controlling interest in a foreign company. **b. Portfolio Investment** - **noncontrolling financial interest in another entity. **It consists of shares in or loans to a company (or country) in the form of bonds, bills, or notes purchased by the investor. **FACTORS IN INCREASED GLOBALIZATION:** 1. **RISE IN AND APPLICATION OF TECHNOLOGY** \- technology accelerates tasks that would be labor-intensive for humans and enhances accuracy. 2. **LIBERALIZATION OF CROSS-BORDER TRADE AND RESOURCE MOVEMENTS** \- countries often impose restrictions on the movement of goods, services, and resources like workers and capital to protect domestic industries. 3. **DEVELOPMENT OF SERVICES THAT SUPPORT IB** \- companies and governments have developed services that facilitate global commerce. 4. **GROWTH OF CONSUMER PRESSURES** \- consumers are more informed, financially capable, and eager for diverse, high-quality, and affordable products from other countries. 5. **INCREASE IN GLOBAL COMPETITION** \- globalization heightens competition by opening new markets, prompting companies to engage in international trade to stay competitive. 6. **CHANGES IN POLITICAL SITUATIONS AND GOVERNMENT POLICIES** \- governments support international trade by improving infrastructure like airports and seaports to enhance delivery efficiency. 7. **EXPANSION OF CROSS-NATIONAL COOPERATION** \- governments increasingly address their interests through international cooperation, using treaties, agreements, and consultations. **THE CRITICISMS OF GLOBALIZATION:** - THREATS TO NATIONAL SOVEREIGNTY - ENVIRONMENTAL STRESS - GROWING INCOME INEQUALITY AND PERSONAL STRESS *sana walang pasok...*