What do the following businesses have in common?

TOPIC: Topic 1: Business Organization and Environment LESSON TITLE: Globalization COMPETENCY FOCUS: Entrepreneurship (S4): To develop your entrepreneurial skills in preparing a realistic proposal for a new business start-up. You will understand the process a business will have to go through when starting up, including the underlying principles of starting a business.   [IB Learner Profile Development: Open-minded] Learning Objectives By the end of the lesson, you should be able to… LO1) To define the term ‘globalzation’  LO2) To explain why businesses may become multinational using real life examples LO3) To analyse the role played by multinationals in the global business environment. SMSC: You will assess the organisational culture of businesses in terms of fundamental structure, purpose and strategy development. CRITICAL THINKING KEY: Knowledge Application Analysis Evaluation

Globalisation Globalisation is the creation of global markets, global businesses and global products. We are fast becoming a ‘world economy’. Globalisation means that: The clothes we buy are made abroad Call centres are located abroad We can import best quality bananas from abroad

Globalisation Why become a multinational? Become closer to main markets Lower costs of production Lower labour rates Cheaper rent and site costs Government grants/incentives Avoid import restrictions Access to local natural resources Exchange rate advantages

Globalisation The problems with globalisation: http://bit.ly/p2Xc9j Watch the video clip and make notes about the problems of globalisation.

Globalisation Technology Communication networks Internet access Integration of economies are made possible by: Technology Communication networks Internet access Growth of economic cooperation – trading blocs (EU, NAFTA, etc.) Collapse of ‘communism’ Movement to free trade

Globalisation Corporate Expansion: Multi-national or trans-national corporations (MNCs or TNCs) – businesses with a headquarters in one country but with business operations in a number of others. Characteristics: Expanding revenue Lowering costs Sourcing raw materials Controlling key supplies Control of processing Global economies of scale

Key terms Research the following key terms & provide your own definitions for each: Multi-national companies Globalisation Free international trade Tariff Quota International Competitiveness Emerging Markets

Research Research & make your own notes on the following: The World Trade Organisation (WTO) Regional Trade Blocs

Exam Practice Read case study on pg. 443 (Raffo) and respond to the following questions. [40mins]

Reflection (TOK) To what extent is globalisation a threat to national culture?