IB Business and Management Organisation and Environment 1.9 Globalisat

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IB Business and Management Organisation and Environment 1.9 Globalisation

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IB Business and Management .com IB Business and Management T he IB Diploma Business and Management course delivered IN STYLE , ONLINE . ©

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z 1.9 globalisation

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z Imagine a world where we were the only country. We woke up one morning and all other countries & people had mysteriously disappeared (as if they’d been tractor-beamed into outer space). How would day-to-day life soon be affected? What opportunities would there now be? globalization

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z globalization The growing integration & interdependence of the world’s economies ↑ World trade over time ↑ foreign direct investment Multinats . ↑ Share of world gdp Cultural awareness & exchange Travel & tourism Info & communication tech. multiculturalism

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z Growing globalization Liberalization of international trade Trade protection reduced + more fta s being negotiated Technological progress Costs of info exchange + transport Deregulation of business activity Less restrictions on fdi & mnc s operating in various countries language English has become the international language of business

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z Effect on business activity ↑ competition More companies in the market place + ecommerce Customer expectations & needs more demanding Economies of scale Choice of location M & A and joint ventures allow businesses to grow much faster Customer base Question 1.9.1: p. 154 Question 1.9.2 : p. 155

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Multinational corporations z A business organization that operates in two or more countries Question 1.9.3: p. 157 Question 1.9.4: p. 159

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Effects of Multinational s There are a variety of effects multinationals have on host countries – both good & bad z

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z Regional Trading blocs Strive to Eliminate trade barriers on the movement of goods & services, labour & capital quotas tariffs Non-tariff barriers (red tape & excessive bureaucracy) eu nafta asean warning!!! Joining a regional trade bloc will increase the competitive environment by an order of magnitude

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