DEFINITION OF GLOBALISATION

Globalization is simply defined as a “process consisting of technological,

economic, political, and cultural dimensions that interconnect individuals, firms,

and governments across national borders.

FACTORS DRIVING GLOBAL BUSINESS

DEVELOPMENT• Global consumers purchasing and spending pattern

Consumer tastes have changed, and consumers are more willing to try foreign

products.The arrival of global satellite television, for example, has exposed consumers

to global advertising. Consumers are more aware of what is available in other

countries, and are keen to give it a try.

Emerging markets in developing countries, especially the ‘Tigers’ of SE Asia eg

Thailand. There has been high growth of incomes in these countries, which makes

large consumer markets with money to spend. Indonesia, for example, whilst still not

particularly rich, has some 350 myn consumers. Both India and China are very poor

countries, but there are small middle classes who are doing very well and have money

to spend. Although these groups are small in the context of the country, the overall

populations are so huge (over 1 byn) that a small middle class adds up to many

millions of consumers.

• Role of World Trade Organization (WTO)

Free Trade. Many barriers to trade have been removed. Some of this has been done

by regional groupings of countries such as the EU (European Union – like

Austria, Belgium, Bulgaria, Croatia etc) . Most of it has been done by the WTO. This

makes trade cheaper and therefore more attractive to business.

• Impact of Rapid Development of New Technology

Technological change, especially in communications technology. For example, UK

businesses and data by satellite to India (taking advantage of the difference in time

zones) where skilled but cheaper data handlers input the data and return it by

satellite for the start of the UK working day.

Apart from that there are also changes/advancement of technology in transportation

industry.

Transport is much cheaper and faster. This is not just aircraft, but also ships. The

development of containerisation in the 1950s was a major breakthrough in goods

handling, and there have been continuing improvements to shipping technology

since then.

• Deregulation of the financial market

Deregulation. From the 1980s onwards (starting in the UK) many rules and

regulations in business were removed, especially rules regarding foreign

ownership. Privatisation also took place, and large areas of business were

now open to purchase and/or take-over. This allowed businesses in one

country to buy those in another. For example, many UK utilities, once

government businesses, are owned by French and US businesses.

IMPACTS OF GLOBALISATION

• Jobs in developing countries vs loss of jobs in developed countries

• Spread of skills in technology

• International cooperation

• Loss of domestic market revenue through tax havens and transfer pricing

TAX HAVEN

WATCH VIDEO – "THE GLOBAL MIND: THE

FUTURE OF GLOBALIZATION AND ITS IMPACT

ON OUR WORLD"

https://www.youtube.com/watch?v=SG8DCgjkGzY

BENEFITS OF HOME GROWN/DEVELOPED

PRODUCTS

It's good for your family and friends

There is a direct correlation between consumer purchasing behaviour and

employment, local economic development and prosperity. When you buy Australian-

made and grown products, you can be sure you are keeping your family members and

friends employed

It's good for Australia

Research published by the Industry Capability Network shows that for every $1 million

of new or retained manufacturing business in Australia, the following effects flow

through the economy:

$333,900 worth of tax revenue generated

$985,000 worth of value-added generated

$95,000 worth of welfare benefits saved

10 full-time jobs created

Example :

Australia provides opportunities in biomedical, diagnostics, medical devices, and agri-

biotech

broadband; energy grids: port productivity and land transport; public transport; and

water supply.

consumer goods sector, predominately made up of the clothing and fashion; cosmetics

and toiletries; and jewellery industries is one of Australia's most exciting and dynamic

areas.

HOME GROWN/DEVELOPED PRODUCTS

Please visit this site for more information on the

Australian specialty :

http://www.austrade.gov.au/Buy/Australian-Industry-

Capability/Consumer-Goods/default.aspx

ROLE OF ETHICS IN GLOBAL BUSINESS

PRACTICES • Environmental harm

• – Dumping of illegal products -Somalia and Malaysia ( water pollution ) –

• e:g : Toxic waste dump site ( youtube )

• -Ecological sustainability – carbon footprints – e:g coca- cola , IBM, Nike

• -Price dumping

• Moving jobs offshore

• Use of child labor

- China & India : low wages paid

- poor working environment

- suicide

- watch video on – exploited labor (Foxconn) – Youtube

**** Also watch on the “Dark side of Globalization “( Youtube)