Globalisation Revision Session

Globalisation – Revision Questions 1.Define Globalisation 2.Identify and explain 4 key drivers of Globalisation over recent years. 3.What are the characteristics of a truly Globalised company? (Global Convergence) 4.What are the characteristics of a company which acts globally but thinks locally? (International Diversity) 5.Which approach is best – Global Convergence or International Diversity?

1. Define Globalisation The movement towards the expansion of economic and social ties between countries through the spread of corporate institutions and the capitalist philosophy that leads to the shrinking of the world in economic terms. The increasing reliance of economies on each other The opportunities to be able to buy and sell in any country in the world The opportunities for labour and capital to locate anywhere in the world The growth of global markets in finance

2. Identify and explain 4 key drivers of Globalisation over recent years. Technology Communication networks Growth of economic cooperation – trading blocs (EU, NAFTA, etc.) Collapse of ‘communism’ Movement to free trade

3. What are the characteristics of a truly Globalised company? (Global Convergence) Driven by the ease, low cost and frequency of international communication, transport and travel Globalising companies are both the consequence and a driver of further global convergence – Expanding revenue – Lowering costs – Sourcing raw materials – Controlling key supplies – Global economies of scale

4. What are the characteristics of a company which acts globally but thinks locally? (International Diversity) Although there is global convergence, new systems and developments create international divergence An opportunity to be exploited as each country’s differences may create innovations – Remaining diversity – Fragmentation – Cultural and institutional identity – Local responsiveness – decentralise

5. Which approach is best – Global Convergence or International Diversity? The answer to this question will depend on a number of factors: – Market structure – Customer needs – Buying behaviour – Distribution channels – Media structure – Infrastructure – Supply structure – Government regulations