COMM 211 Global Buisness STUDY QUIZ 1:
chapter 1,2,3 + 5,6 COMPLETE STUDY GUIDE
2025 Concordia University
12:10 PM
Chapter 1 : Globalization
Introduction:
• Fundamental shift in the world economy:
o
Moving away from world in which national economies were relatively self-
contained entities, isolated from each other by barriers to cross-border
trade and investment. By distance, time zone, language and national
differences in government regulation, culture and business systems.
o
Moving toward a world in which barriers to cross-border trade and investment
are tumbling; perceived distance is shrinking to advances in transportation and
telecommunications technology; material culture is starting to look similar the
world over; and national economies are merging into an interdependent
global economic system.
o
This process is commonly referred to as globalization.
• The volume of goods, services and investment crossing national borders expanded
faster than world output every year during the last two decades of the 20th
century.
• A world in which international institutions, such as the World Trade organization, and
gatherings of leaders from the world's most powerful economies have called for
even lower barriers to cross-border trade and investment.
o
A world where the symbols of material and popular culture are
increasingly global - ie Coca Cola, mcdonald's , Sony's Playstation…
o
Products are made from input coming from all over the world.
o
A world where a financial crisis in America can trigger a global
economic recession.
• Not everyone agrees with globalization.
o
Opponents blame it for many reasons, from unemployment in developed
nations (especially manufacturing jobs) to environmental degradation to
the Americanization of popular culture.
o
Political leaders are listening:
•
Recent election (US): both parties spoke about renegociating free
trade agreements.
•
Trump talked about tearing the North American Free Trade Agreement
(NAFTA)
• Impact on business - despite economic slowdown and rising voices against free trade:
o
Increased opportunities for firms to expand their revenues by selling around
the world and to reduce the costs by producing in nations where key inputs are
cheap.
o
Since the collapse of communism at the end of 1980s - the pendulum of
public policy in nation after nation has swung toward the free market end of
the economic spectrum.
o
Regulatory and administrative barriers to doing business in foreign nations
have come down, while those nations have often transformed their economies:
, privatizing state-owned enterprises, deregulating markets, increasing
competition, and welcoming investment by foreign businesses.
o
Allowed businesses, both large and small, from both advanced and
developing nations to expand internationally.
o
Example: Starbucks
• Impact on industries and jobs:
o
As globalization unfolds is transforming industries and creating anxiety
among those who believed their jobs were protected from foreign
competition.
o
Historically: manufacturing workers worried about the impact foreign
competition might have on their jobs, while service workers felt more
secure.
o
This is changing: advances in technology, lower transportation costs and the
rise of skilled workers in developed countries imply that many services no
longer have to be performed where they are delivered.
•
Example: accounting services- many US and Canada citizens have their
tax returns compiled in India.
o
People living in developed nations no longer have the playing field tilted in
their favour.
o
Enterprising individuals based in India, Chine or Brazil have the same
opportunities as those living in western Europe, Canada or the United
States.
LO1: What is globalization
• It refers to the shift toward a more integrated an interdependent world economy.
• It has several facets.
• The development in communications technology and a homogenization of
economies have resulted in the concept of a worldwide consumer.
• Globalization of markets:
o
It refers to the merging of historically distinct and separate markets into
one huge global marketplace.
o
Falling barriers to cross-border trade have also made it easier to
sell internationally.
o
It has been argued that tastes and preferences of consumers in different
nations are beginning to converge on some global norm, thereby helping to
create a global market.
o
Brands like Coca-Cola, Mcdonald's and Apple are more than just benefactors
of this trend, they are also the facilitators of it.
•
By offering a standardized product worldwide, they help create a global
market.
o
The view that national markets are giving way to the global markets should
not be pushed too far.
•
Very significant differences still exist between national markets along
many relevant dimensions; such as consumer tastes and preferences,
distribution channels, culturally embedded value systems, business
systems and legal regulations.
•
These differences frequently require that marketing strategies, product
features, and operating practices be customized to best match
conditions in a country.
, •
Example: automobile companies will promote different car models
depending on a range of factors such as local fuel costs, income
levels, traffic congestion and cultural values.
o
Most global markets are not market for consumer products - where national
differences in taste and preferences are still important enough to act as a
brake on globalization - but market for industrial goods and materials that
serve as a universal need.
•
These includes:
1. Markets for commodities such as aluminum, oil, and wheat;
2. Markets for industrial products such as microprocessors ,
DRAMS (computer memory chips) and commercial jet
aircraft.
3. The markets for computer software;
4. The markets for financial assets, from Canadian Treasury bills
to eurobonds to futures on the Nikkei index or the Mexican
peso.
•
In many global markets, the same firms are frequently confronting each
other as competitors in nation after nation.
1. Coca-Cola and Pepsi, Ford and Toyota, Bombardier
and Embraer…
2. If one firms moves into a nation that is not currently served
by its rivals, those are sure to follow to prevent their
competitor from gaining an advantage.
3. As firms follow each other around the world, they bring with
them many of the assets that served them will other national
markets: productions, operating strategies, marketing
strategies and brand names. Which creates some homogeneity
across markets.
4. Thus, greater uniformity replaces diversity.
5. In an increasing number of industries, it is no longer meaningful
to talk about individual country markets, for many firms there
is only the global market.
•
The globalization of production:
o
Refers to sourcing goods and services from locations around the global to take
advantage of national differences in the cost and quality of factors of
production (such as labor, energy, land, energy, land, and capital).
•
By doing this , cies hope to lower their overall cost structure and/or
improve the quality or functionality of their product offering - allowing
them to compete more effective.
o
Example: Bombardier's ongoing global expansion in manufacturing its CS300
series of regional aircraft , with its first sale in November 2016 to Air Baltic,
the flag carrier of Latvia.
o
The global dispersal of productive activities is not limited to giants such
as Bombardier. Smaller firms are also tapping into the global
marketplace. Example: Matrikon, based in Alberta.
o
Foreign direct investment (FDI), along with the diversification of its
manufacturing, design and distributor channels, enable Matrikon to build
a global competitive advantage for process-improvement software.
, o
In many industries it is becoming irrelevant to talk about individual
country's products.
•
Given the growth of international outsourcing, manufactured goods are
increasingly being described as global products.
•
As with globalization of markets, one must be careful not to
push globalization of production too far.
1. Substantial impediments still make it difficult for firms to
achieve the optimal dispersion of their productive activities
to locations around the globe.
i. Including: formal and informal barriers to trade
between countries; barriers to foreign direct
investment, transportation costs, and issues
associated with economic and political risk.
LO2: The emergence of Global Institutions
• Institutions need to help manage, regulate, and police the global marketplace
and promote the establishment of multinational treaties to govern the global
business system.
• Number of important institutions have bee created to help with that. Include:
o The General Agreement on Tariffs and Trade (GATT) and its successor:
The World Trade Organization (WTO)
o The International Monetary Fund (IMF) and its sister the World Bank
o The United Nations (UN).
• All these institutions were created by voluntary agreement between individual
nation- states, and their functions are enshrined in international treaties.
• The World Trade Organization (GATT Before)
o Primarily responsible for policing the world trading system;
o Making sure nation-states adhere to the rules laid down in trade treaties
signed by WHO member-states.
o There are 164 countries. With 21 undergoing the adhesion process.
o Over its history, promoted lowering barriers to cross-border trade
and investment.
•
Sought to create a more open global business system unencumbered
by barriers to trade and investment between countries.
o Without institutions like the WHO, it is unlikely that the globalization
would have proceeded as far as it has.
o Critics charged it with usurping the national sovereignty of individual
nation- states.
•
The International Monetary Fund and The World Bank
o Both created in 1944 by 44 nations.
o The task of the IMF is to maintain order in the international monetary system.
o The task of the World Bank was to promote economic development.
o Both institutions have emerged as significant players in the global economy.
o The World Bank is the less controversial one.
chapter 1,2,3 + 5,6 COMPLETE STUDY GUIDE
2025 Concordia University
12:10 PM
Chapter 1 : Globalization
Introduction:
• Fundamental shift in the world economy:
o
Moving away from world in which national economies were relatively self-
contained entities, isolated from each other by barriers to cross-border
trade and investment. By distance, time zone, language and national
differences in government regulation, culture and business systems.
o
Moving toward a world in which barriers to cross-border trade and investment
are tumbling; perceived distance is shrinking to advances in transportation and
telecommunications technology; material culture is starting to look similar the
world over; and national economies are merging into an interdependent
global economic system.
o
This process is commonly referred to as globalization.
• The volume of goods, services and investment crossing national borders expanded
faster than world output every year during the last two decades of the 20th
century.
• A world in which international institutions, such as the World Trade organization, and
gatherings of leaders from the world's most powerful economies have called for
even lower barriers to cross-border trade and investment.
o
A world where the symbols of material and popular culture are
increasingly global - ie Coca Cola, mcdonald's , Sony's Playstation…
o
Products are made from input coming from all over the world.
o
A world where a financial crisis in America can trigger a global
economic recession.
• Not everyone agrees with globalization.
o
Opponents blame it for many reasons, from unemployment in developed
nations (especially manufacturing jobs) to environmental degradation to
the Americanization of popular culture.
o
Political leaders are listening:
•
Recent election (US): both parties spoke about renegociating free
trade agreements.
•
Trump talked about tearing the North American Free Trade Agreement
(NAFTA)
• Impact on business - despite economic slowdown and rising voices against free trade:
o
Increased opportunities for firms to expand their revenues by selling around
the world and to reduce the costs by producing in nations where key inputs are
cheap.
o
Since the collapse of communism at the end of 1980s - the pendulum of
public policy in nation after nation has swung toward the free market end of
the economic spectrum.
o
Regulatory and administrative barriers to doing business in foreign nations
have come down, while those nations have often transformed their economies:
, privatizing state-owned enterprises, deregulating markets, increasing
competition, and welcoming investment by foreign businesses.
o
Allowed businesses, both large and small, from both advanced and
developing nations to expand internationally.
o
Example: Starbucks
• Impact on industries and jobs:
o
As globalization unfolds is transforming industries and creating anxiety
among those who believed their jobs were protected from foreign
competition.
o
Historically: manufacturing workers worried about the impact foreign
competition might have on their jobs, while service workers felt more
secure.
o
This is changing: advances in technology, lower transportation costs and the
rise of skilled workers in developed countries imply that many services no
longer have to be performed where they are delivered.
•
Example: accounting services- many US and Canada citizens have their
tax returns compiled in India.
o
People living in developed nations no longer have the playing field tilted in
their favour.
o
Enterprising individuals based in India, Chine or Brazil have the same
opportunities as those living in western Europe, Canada or the United
States.
LO1: What is globalization
• It refers to the shift toward a more integrated an interdependent world economy.
• It has several facets.
• The development in communications technology and a homogenization of
economies have resulted in the concept of a worldwide consumer.
• Globalization of markets:
o
It refers to the merging of historically distinct and separate markets into
one huge global marketplace.
o
Falling barriers to cross-border trade have also made it easier to
sell internationally.
o
It has been argued that tastes and preferences of consumers in different
nations are beginning to converge on some global norm, thereby helping to
create a global market.
o
Brands like Coca-Cola, Mcdonald's and Apple are more than just benefactors
of this trend, they are also the facilitators of it.
•
By offering a standardized product worldwide, they help create a global
market.
o
The view that national markets are giving way to the global markets should
not be pushed too far.
•
Very significant differences still exist between national markets along
many relevant dimensions; such as consumer tastes and preferences,
distribution channels, culturally embedded value systems, business
systems and legal regulations.
•
These differences frequently require that marketing strategies, product
features, and operating practices be customized to best match
conditions in a country.
, •
Example: automobile companies will promote different car models
depending on a range of factors such as local fuel costs, income
levels, traffic congestion and cultural values.
o
Most global markets are not market for consumer products - where national
differences in taste and preferences are still important enough to act as a
brake on globalization - but market for industrial goods and materials that
serve as a universal need.
•
These includes:
1. Markets for commodities such as aluminum, oil, and wheat;
2. Markets for industrial products such as microprocessors ,
DRAMS (computer memory chips) and commercial jet
aircraft.
3. The markets for computer software;
4. The markets for financial assets, from Canadian Treasury bills
to eurobonds to futures on the Nikkei index or the Mexican
peso.
•
In many global markets, the same firms are frequently confronting each
other as competitors in nation after nation.
1. Coca-Cola and Pepsi, Ford and Toyota, Bombardier
and Embraer…
2. If one firms moves into a nation that is not currently served
by its rivals, those are sure to follow to prevent their
competitor from gaining an advantage.
3. As firms follow each other around the world, they bring with
them many of the assets that served them will other national
markets: productions, operating strategies, marketing
strategies and brand names. Which creates some homogeneity
across markets.
4. Thus, greater uniformity replaces diversity.
5. In an increasing number of industries, it is no longer meaningful
to talk about individual country markets, for many firms there
is only the global market.
•
The globalization of production:
o
Refers to sourcing goods and services from locations around the global to take
advantage of national differences in the cost and quality of factors of
production (such as labor, energy, land, energy, land, and capital).
•
By doing this , cies hope to lower their overall cost structure and/or
improve the quality or functionality of their product offering - allowing
them to compete more effective.
o
Example: Bombardier's ongoing global expansion in manufacturing its CS300
series of regional aircraft , with its first sale in November 2016 to Air Baltic,
the flag carrier of Latvia.
o
The global dispersal of productive activities is not limited to giants such
as Bombardier. Smaller firms are also tapping into the global
marketplace. Example: Matrikon, based in Alberta.
o
Foreign direct investment (FDI), along with the diversification of its
manufacturing, design and distributor channels, enable Matrikon to build
a global competitive advantage for process-improvement software.
, o
In many industries it is becoming irrelevant to talk about individual
country's products.
•
Given the growth of international outsourcing, manufactured goods are
increasingly being described as global products.
•
As with globalization of markets, one must be careful not to
push globalization of production too far.
1. Substantial impediments still make it difficult for firms to
achieve the optimal dispersion of their productive activities
to locations around the globe.
i. Including: formal and informal barriers to trade
between countries; barriers to foreign direct
investment, transportation costs, and issues
associated with economic and political risk.
LO2: The emergence of Global Institutions
• Institutions need to help manage, regulate, and police the global marketplace
and promote the establishment of multinational treaties to govern the global
business system.
• Number of important institutions have bee created to help with that. Include:
o The General Agreement on Tariffs and Trade (GATT) and its successor:
The World Trade Organization (WTO)
o The International Monetary Fund (IMF) and its sister the World Bank
o The United Nations (UN).
• All these institutions were created by voluntary agreement between individual
nation- states, and their functions are enshrined in international treaties.
• The World Trade Organization (GATT Before)
o Primarily responsible for policing the world trading system;
o Making sure nation-states adhere to the rules laid down in trade treaties
signed by WHO member-states.
o There are 164 countries. With 21 undergoing the adhesion process.
o Over its history, promoted lowering barriers to cross-border trade
and investment.
•
Sought to create a more open global business system unencumbered
by barriers to trade and investment between countries.
o Without institutions like the WHO, it is unlikely that the globalization
would have proceeded as far as it has.
o Critics charged it with usurping the national sovereignty of individual
nation- states.
•
The International Monetary Fund and The World Bank
o Both created in 1944 by 44 nations.
o The task of the IMF is to maintain order in the international monetary system.
o The task of the World Bank was to promote economic development.
o Both institutions have emerged as significant players in the global economy.
o The World Bank is the less controversial one.
