1. What does it mean by Globalisation?
Answer:- In today’s business world, managers, politicians, journalists and academics
commonly use the concepts of ‘globalisation’, ‘global industries’, ‘global competition’,
‘global strategies’ and ‘global corporations’. More and more companies are confronted
with the need to globalise or die. While those concepts are widely used, their meaning is
often not well understood. For some people, globalisation means to expand the
company’s presence abroad, for others it means standardising a product and selling it to
the world, for yet others it denotes an approach to management in which decision-making
is centralised at corporate headquarters. There are many reasons for this confusion; one is
due to the fact that the concept of globalisation is relatively new. Before the 1970s almost
no one talked about globalisation; the most frequently used terminology, when referring
to companies operating in various part of the world, was ‘multinational’ or occasionally
‘transnational’. Multinational companies have been around for many years. Even if we
ignore the East India Company, which started in the early seventeenth century, modern
corporations like Unilever, Nestlé, and Procter & Gamble were operating all over the
world at the end of the nineteenth century. They are known as multinational companies,
but nobody would have called them global.
Globalization refers to any activity that brings the people, cultures and economies of
different countries closer together. In business, "globalization" refers to practices by
which organizations become better connected to their customers around the world. This
includes any aspect of operating in different national markets, from product design to
marketing.
Globalization Examples
If that’s still a bit vague for you, here are a few examples of globalization in the world of
business: Online marketplaces like eBay and Amazon make it easy to buy products from
businesses or individuals on the other side of the planet. Even products sold in traditional
brick-and-mortar stores like Target often make stops in several different countries before
reaching their final destinations. Consumer electronics, for example, are commonly
sourced from raw materials in India, made in China, then sold in America.
Many large restaurant chains, like McDonald's, operate in dozens of countries.
McDonald's specifically has franchises in upwards of one hundred countries, and diners
around the world recognize its brand and logo.
Netflix operates in more than 190 countries and customizes content offerings for
individual markets with subtitles and programming in local languages.
The instantly recognizable "swoosh" logo of Nike transcends different cultures and
languages. Nike has formed partnerships with athletes who play a variety of sports in
many different countries and uses these endorsements to support its worldwide
expansion.
, 2. Factors that push globalization, The benefits of globalization, factors that
work against globalization.
Answer:-
Factors that push globalization
Technological change
Rapid and sustained technological change has reduced the cost of transmitting and
communicating information – sometimes known as “the death of distance” – a key factor behind
trade in knowledge products using web technology
Economies of scale
Many economists believe that there has been an increase in the minimum efficient scale (MES)
associated with some industries. If the MES is rising, a domestic market may be regarded as too
small to satisfy the selling needs of these industries. Many emerging countries have their own
transnational corporations
Differences in tax systems
The desire of businesses to benefit from lower unit labour costs and other favourable production
factors abroad has encouraged countries to adjust their tax systems to attract foreign direct
investment (FDI). Many countries have become engaged in tax competition between each other
in a bid to win lucrative foreign investment projects.
Less protectionism
Old forms of non-tariff protection such as import licensing and foreign exchange controls have
gradually been dismantled. Borders have opened and average import tariff levels have fallen.
That said, it is worth knowing that, in the last few years, there has been a rise in non-tariff
barriers such as import quotas as countries have struggled to achieve real economic growth and
as a response to persistent trade and current account deficits.
Growth Strategies of Transnational and Multinational Companies
In their pursuit of revenue and profit growth, increasingly global businesses and brands have
invested significantly in expanding internationally. This is particularly the case for businesses
owning brands that have proved they have the potential to be successfully globally, particularly
in faster-growing economies fuelled by growing numbers of middle class consumers.
Political Factors
Technological Factors.
, factors that work against globalization
Cultural factors: attitudes, tastes, behaviour and social codes When the consumption of a
product or a service is linked to traditions and national or religious values, global standardisation
is not effective. Some products – for instance, Kretek (tobacco and clove) cigarettes in Indonesia,
or the Pachinko (pinball) game in Japan – are unique to one society and their globalisation is
nearly impossible, although one can argue that with innovative marketing it may be possible to
do so.
Commercial factors: distribution, customisation and responsiveness In some sectors,
distribution networks and practices differ from country to country and as a consequence the ways
of managing the network, motivating dealers and distributors, pricing, and negotiation are hardly
amenable to global co-ordination.
Technical factors: standards, spatial presence, transportation and languages Technical standards
in electrical, civil, chemical or mechanical engineering can create a burden for global companies.
Scale economies and cost benefits of global integration and standardisation cannot be exploited
fully when technical standards vary greatly.
Technical factors: standards, spatial presence, transportation and languages Technical standards
in electrical, civil, chemical or mechanical engineering can create a burden for global companies.
Scale economies and cost benefits of global integration and standardisation cannot be exploited
fully when technical standards vary greatly.
3. Globalization and strategic management
The term "strategic management" refers to a systematic approach of planning and
executing a company's path to success. Large numbers of businesses struggle to gain
market share in finite marketplaces, where there is only so much money to go around.
This requires competitiveness. Globalization refers to the quickening pace of
international trade and the steadily increasing reliance of individual economies on each
other. Competitiveness and globalization are linked with strategic management, and
understanding how these concepts tie in to each other is required to form a successful
long-term strategy for your business.
Globalization
Advances in communications technology and global travel have changed the way
business is done all over the globe. A face-to-face meeting that would have once
required a three-month voyage now only requires an eight-hour flight. In the 21st
century, even cross-continental flights are being replaced by instantaneous video chat
over the Internet. News travels instantly from one side of the globe to the other, and
business transactions occur just as quickly. Competitors on opposite sides of the globe
can find themselves with distinct advantages or weaknesses stemming from their local
Answer:- In today’s business world, managers, politicians, journalists and academics
commonly use the concepts of ‘globalisation’, ‘global industries’, ‘global competition’,
‘global strategies’ and ‘global corporations’. More and more companies are confronted
with the need to globalise or die. While those concepts are widely used, their meaning is
often not well understood. For some people, globalisation means to expand the
company’s presence abroad, for others it means standardising a product and selling it to
the world, for yet others it denotes an approach to management in which decision-making
is centralised at corporate headquarters. There are many reasons for this confusion; one is
due to the fact that the concept of globalisation is relatively new. Before the 1970s almost
no one talked about globalisation; the most frequently used terminology, when referring
to companies operating in various part of the world, was ‘multinational’ or occasionally
‘transnational’. Multinational companies have been around for many years. Even if we
ignore the East India Company, which started in the early seventeenth century, modern
corporations like Unilever, Nestlé, and Procter & Gamble were operating all over the
world at the end of the nineteenth century. They are known as multinational companies,
but nobody would have called them global.
Globalization refers to any activity that brings the people, cultures and economies of
different countries closer together. In business, "globalization" refers to practices by
which organizations become better connected to their customers around the world. This
includes any aspect of operating in different national markets, from product design to
marketing.
Globalization Examples
If that’s still a bit vague for you, here are a few examples of globalization in the world of
business: Online marketplaces like eBay and Amazon make it easy to buy products from
businesses or individuals on the other side of the planet. Even products sold in traditional
brick-and-mortar stores like Target often make stops in several different countries before
reaching their final destinations. Consumer electronics, for example, are commonly
sourced from raw materials in India, made in China, then sold in America.
Many large restaurant chains, like McDonald's, operate in dozens of countries.
McDonald's specifically has franchises in upwards of one hundred countries, and diners
around the world recognize its brand and logo.
Netflix operates in more than 190 countries and customizes content offerings for
individual markets with subtitles and programming in local languages.
The instantly recognizable "swoosh" logo of Nike transcends different cultures and
languages. Nike has formed partnerships with athletes who play a variety of sports in
many different countries and uses these endorsements to support its worldwide
expansion.
, 2. Factors that push globalization, The benefits of globalization, factors that
work against globalization.
Answer:-
Factors that push globalization
Technological change
Rapid and sustained technological change has reduced the cost of transmitting and
communicating information – sometimes known as “the death of distance” – a key factor behind
trade in knowledge products using web technology
Economies of scale
Many economists believe that there has been an increase in the minimum efficient scale (MES)
associated with some industries. If the MES is rising, a domestic market may be regarded as too
small to satisfy the selling needs of these industries. Many emerging countries have their own
transnational corporations
Differences in tax systems
The desire of businesses to benefit from lower unit labour costs and other favourable production
factors abroad has encouraged countries to adjust their tax systems to attract foreign direct
investment (FDI). Many countries have become engaged in tax competition between each other
in a bid to win lucrative foreign investment projects.
Less protectionism
Old forms of non-tariff protection such as import licensing and foreign exchange controls have
gradually been dismantled. Borders have opened and average import tariff levels have fallen.
That said, it is worth knowing that, in the last few years, there has been a rise in non-tariff
barriers such as import quotas as countries have struggled to achieve real economic growth and
as a response to persistent trade and current account deficits.
Growth Strategies of Transnational and Multinational Companies
In their pursuit of revenue and profit growth, increasingly global businesses and brands have
invested significantly in expanding internationally. This is particularly the case for businesses
owning brands that have proved they have the potential to be successfully globally, particularly
in faster-growing economies fuelled by growing numbers of middle class consumers.
Political Factors
Technological Factors.
, factors that work against globalization
Cultural factors: attitudes, tastes, behaviour and social codes When the consumption of a
product or a service is linked to traditions and national or religious values, global standardisation
is not effective. Some products – for instance, Kretek (tobacco and clove) cigarettes in Indonesia,
or the Pachinko (pinball) game in Japan – are unique to one society and their globalisation is
nearly impossible, although one can argue that with innovative marketing it may be possible to
do so.
Commercial factors: distribution, customisation and responsiveness In some sectors,
distribution networks and practices differ from country to country and as a consequence the ways
of managing the network, motivating dealers and distributors, pricing, and negotiation are hardly
amenable to global co-ordination.
Technical factors: standards, spatial presence, transportation and languages Technical standards
in electrical, civil, chemical or mechanical engineering can create a burden for global companies.
Scale economies and cost benefits of global integration and standardisation cannot be exploited
fully when technical standards vary greatly.
Technical factors: standards, spatial presence, transportation and languages Technical standards
in electrical, civil, chemical or mechanical engineering can create a burden for global companies.
Scale economies and cost benefits of global integration and standardisation cannot be exploited
fully when technical standards vary greatly.
3. Globalization and strategic management
The term "strategic management" refers to a systematic approach of planning and
executing a company's path to success. Large numbers of businesses struggle to gain
market share in finite marketplaces, where there is only so much money to go around.
This requires competitiveness. Globalization refers to the quickening pace of
international trade and the steadily increasing reliance of individual economies on each
other. Competitiveness and globalization are linked with strategic management, and
understanding how these concepts tie in to each other is required to form a successful
long-term strategy for your business.
Globalization
Advances in communications technology and global travel have changed the way
business is done all over the globe. A face-to-face meeting that would have once
required a three-month voyage now only requires an eight-hour flight. In the 21st
century, even cross-continental flights are being replaced by instantaneous video chat
over the Internet. News travels instantly from one side of the globe to the other, and
business transactions occur just as quickly. Competitors on opposite sides of the globe
can find themselves with distinct advantages or weaknesses stemming from their local
