Globalisation and the EU Learning outcomes To be able to identify types of globalisation(E) To be able to understand the impact globalisation has on businesses (C) To be able to analyse the impact of changing exchange rates on a business (A)

So you live in 2015 and consider yourself to be a switched on connected individual – phone Internet and so on, so.... What do you think globalisation is? HOME OR AWAY??

What is globalisation? Generally defined as the network of connections of organisations and peoples are across national, geographic and cultural borders and boundaries. These global networks are creating a shrinking world where local differences and national boundaries are reducing.

What is globalisation? cont.. This is the trend where people are becoming more interconnected and interdependent. Information technology is driving this trend by enabling companies to move money and ideas instantly at the click of a mouse. The ways in which goods and information are moved between countries are becoming easier.

What does globalisation mean for everyone then? People around the globe are more connected to each other than ever before. Information and money flow more quickly than ever. Goods and services produced in one part of the world are increasingly available in all parts of the world. International travel is more frequent. What is this?

Small business globalisation Ebay and Amazon make it easy for companies outside of UK to trade Customers can pay with paypal Good can be dispatched air mail

Forms of Globalisation Globalisation takes may forms and in business the following are the most notable: – International Trade (Most fashion retail) – Production Abroad (Holden plc) – Outsourcing abroad (Slazenger Tennis balls) – Multinational Corporations (Apple) – Global Branding (McDonalds) – People Movement (Brammer plc)

Globalisation sample paper question

Uk international trade International trade is the exchange of goods and services between different countries. UK business can compete against foreign rivals by offering better designed, higher quality products at lower prices. Uk premier Exports

We EXPORT good to other countries

Where do we export all this stuff to then?

What are we buying and selling (mostly) We Sell - Export We buy - import

Carbon footprint of all these imports??

What goods do you think we import Which country do you think we import the most from?

What do we import? Cocoa from Africa Electrics from China Cars from USA and Germany Wine from France (UK is largest importer in the world of wine) Oil Wood United Kingdom imported $636 billion worth of foreign goods in 2010 led by foodstuffs, fuels, machinery and manufactured goods. Leading suppliers to the UK market were Germany (13.1%), US (8.7%), China (7.5%), Netherlands (7.4%), France (6.8%), Norway (6%), Belgium (4.7%) and Italy (4.1%).

UK trade with EU Trading with other European Union (EU) countries offers a number of key benefits to businesses in the UK. The EU's 28 member states include some of the world's wealthiest and most productive countries. The EU is a huge market in which to sell your goods and services - it also gives you access to a huge source of suppliers.

Globalisation generally has put pressure on many traditional job sectors in the developed world. Many of the newer members of the EU have economies with much lower costs, making them attractive sources of production for businesses in this country. And many workers from the new Member States have come to work to the UK, and some other Member States. This has benefited our economy overall. But this is only one facet of globalisation. EU enlargement should help increase the prosperity of new member states in Eastern Europe, opening new opportunities for UK businesses.

Can you name all 28 member states You have 5 mins, one with the most wins an achievement point!!!

AustriaBelgiumCyprus Czech RepublicDenmarkEstonia FinlandFranceGermany GreeceHungaryIreland ItalyLatviaLithuania LuxembourgMaltaNetherlands PolandPortugalSlovakia SloveniaSpainSweden United KingdomRomaniaBulgaria Croatia

Single market At the core of the EU is the single market - the programme of freeing up the trade of goods and services and the movement of people between EU countries. The aim is that doing business with other EU countries should become increasingly like doing business within your own country.

What do businesses need to consider when trading with the EU? Cultural differences - what is a staple item to us may not be to another country (consider pot noodle to china) Language barriers – do you need a translation service? Legislation – EU banned export of British beef Transport – freight EU relaxes ban on exports of beef from Scotland EU trade video For more complex analysis 5 mins

Exchange Rates and Ethics Last Lesson….. We covered globalisation and the EU. Today……We will look at exchange rates and ethics. Next week….. We will look at the role of the government in supply and demand. Learning objective 1.To be able to confidently calculate exchange rates. 2.To understand the ethical issues within a business workplace.

Exchange rate effect on business Money is demanded in order for it to be used to buy and sell goods and services. The same applies to international currency. Foreigners buy pounds in order to buy British and other goods and services. The exchange rate is the rate at which the £1 will exchange with other currencies

Exchange rate calculation examples We will assume that £1 initially exchanges for 2 euros. If Nestle sells one Kitkat for 50p in this country, it will cost 1euro in France! However if the £ falls in value to £1.50 euros the same Kitkat will only cost 0.75 euros in France. We would therefore expect Nestle to sell more chocolate bars and other goods in the European Union at the lower exchange rate. So is a weak £ good or bad for UK exports???

Exchange rates Using the below table work out how much a £250 laptop would cost in each country if bought there. Ans:

Sample paper question on exchange rates

Answer to past paper question

Another sample paper exchange rate question (bit harder this time) Note: exchange rate in 2008 was £1- $2.00

Answer

Business ethics

What do you think “Ethics” means?

What does ethics actually mean? It means... What is morally right and what is morally wrong. Many years ago people thought that it was right to trade in slaves now people think it is wrong.

In pairs (or threes), how many ethical issues can you identify that a business may have to deal with?

Discriminating workers because of age, gender or race Spying on workers Having poor health and safety Selling faulty or dangerous products

Causing pollution Testing products on animals Using child labour Buying very cheaply from third world producers Business executives giving themselves large bonuses even if the business does not perform well

Ethics Activity You will be working in your table groups now to make a range of ethical decisions. For each scenario you must follow the ethical decision making process and write down your thoughts on A3 paper on your table. There are 5 cases so make sure you leave enough room.

Activity For all scenarios, assume you are employed by Best Computer Systems, a large computer manufacturing company with approximately 1000 employees. The company is located in a large metropolitan area.