IBG - 1 Globalisation S2 2014

8/10/2019 IBG - 1 Globalisation S2 2014

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Copyright 2011 McGraw-Hill Australia Pty LtdPPTs t/a Global Business Today 2e by Hill, Cronk and WickramasekeraSlides prepared by Fuming Jiang

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International Business G


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Unit Convenor

Dr Michael Corliss

Room: 6D14

Phone: 6206 8918

Email: [email protected]

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Materials for the Unit

Unit Outline

Text Book

Unit Website

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Assessment

Workshop participation 10%

Report Plan 30%

Final Report 60%

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Copyright 2011 McGraw-Hill Australia Pty Ltd

PPTs t/a Global Business Today 2e by Hill, Cronk and WickramasekeraSlides prepared by Fuming Jiang

Overview of Unit Globalisation

National Differences in the Political Economy

Political Economy and Economic Development

International Trade Theory

The Political Economy of International Trade

The Global Monetary System

Foreign Direct Investment

Regional Economic Integration

Differences in Culture

The Strategy of International Business

Entry Strategy and Strategic Alliance Exporting, Importing and Counter Trade

Global Production, Outsourcing and Logistics

Global Marketing and R&D

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Globalisation

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Lecture/chapter topics

Introduction What is globalisation?

The emergence of global institutions

Drivers of globalisation

The changing shape of the global economy

The globalisation debate

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Introduction

A fundamental shift is occurring in theworld economy

Integrated world economy

Interdependent world economy

Globalisation and opportunities

Globalisation and threats

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What is globalisation?

Globalisation refers to the shift towards amore integrated and interdependent world

economy.

Facets of globalisation

Globalisation of markets

Globalisation of production

Emergence of global institutions

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The emergence of global

institutions

Over the past 60-plus years, a number of

important global institutions have been

created to: help manage, regulate and police the global

marketplace

promote the establishment of multinational

treaties to govern the global business system WTO, IMF, WORLD BANK, UN

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Average Tariff Rates on Manufactured

Products


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Volume of World Trade and World

Production


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FDI Inflows and Trade, Growth Rates


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Drivers of globalisation

The role of technological change The lowering of trade barriers made globalisation of

markets and production a theoretical possibility;

technological change made it a tangible reality.

Major technological advancements: microprocessors and telecommunications

the Internet and the World Wide Web

transportation technology

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The changing shape of the global

economy

As late as the 1960s, four stylised factorsdescribed the global economy:

The US dominated the world economy and the

world trade picture.

There was US domination in foreign direct

investment (FDI).

US multinationals dominated the international

business scene.

The centrally planned economies of the communist

world were off limits to Western international

business.

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economy

The changing world output and thechanging world trade picture

In the early 1960s, the US was the world's dominant

industrial power, accounting for about 40.3% of

world output. By 2009 the US accounted for only 20.1% of world

output, and 9.3% of world trade.

Germany, France and the United Kingdom, all

nations that were among the first to industrialise,also saw their relative standing slip. http://www.abc.net.au/lateline/content/2011/s3294118.htm Minute 4:03

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http://www.abc.net.au/lateline/content/2011/s3294118.htmhttp://www.abc.net.au/lateline/content/2011/s3294118.htm


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Changing Pattern of World Output and

Trade


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economy

The changing picture of foreign directinvestment (FDI)

The stock of FDIs generated by rich industrial

countries has been on a steady decline.

There has been sustained growth in cross-borderflows of FDI.

The flow of FDI has been directed at developing

nations, especially China.

In 2009, Chinas FDI in US companies exceeded USinvestment in Chinese entities.

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Percentage share of total FDI stock,

19802008, selected years

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FDI inflows, 19702008, by economy type and

selected years (percentage of world total)

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FDI inflows, 2000, 2008, selected countries

(percentage of world total)

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Th h i h f th l b l


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economy

The changing nature of multinational

enterprises (MNEs)

The growth of MNEs from Japan, European nations,

Australia and New Zealand after

World War II

Expected growth of new MNEs from the world's

developing nations

Predominance of US MNEs began to decline in 1990s

The dominance of Japanese MNEs has also fallensignificantly in the last decade.

The rise of mini-multinationals

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economy

The changing world order

The collapse of communism in Eastern Europe presents

a host of export and investment opportunities for

Western businesses. The economic development of China poses huge

opportunities and risks, in spite of its continued

Communist control.

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The Globalisation debate

Globalisation, jobs and incomes Globalisation, labour policies and the

environment

Globalisation and nationalsovereignty

Globalisation and the worlds poor

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Employment by Industry, 1975 to 2005, per cent

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0

10

20

30

40

50

6070

80

1975 1985 1995 2005

Ag/mining Manuf Ut/Con/Tran/Com Services


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Unemployment Rate, 1978-2006, per cent

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0

2

4

6

8

10

12

1978 1982 1986 1990 1994 1998 2002 2006


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Real Average Weekly Ordinary Time Earnings, $2006.

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700

750

800

850

900

950

1000

1050

1100

Male Female


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Globalisation, Labour Policies and

Environment

Investment shifts towards countries with littleregulation to protect labour and the

environment

Due to complying with governmentregulation is very expensive

Economic progress goes hand in hand with

tougher environmental protect and labour

laws

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Income Levels and Environmental Pollution

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Globalisation and national sovereignty

Unelected bureaucrats from organisationssuch as the WTO or IMF making decisions

which effect many aspects of daily life

For instance whether or not a country can ban hormone

treated meat;

If carcinogenic pesticides can be banned from

its foods

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Globalisation and the worlds poor

The gap between the rich and poor countriesgetting wider

Reasons other than globalisation to blame

including corruption, totalitarian regimes,

poor protection of private property, war, debt

etc

Debt relief

Debt relief has been tried before

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Critical Thinking

1. Describe the shifts in the world economy over the last 30 years.

What are the implications of these shifts for international businesses

based in Great Britain? North America? Hong Kong?

2. What are the drivers of globalisation? How have changes in

technology contributed to the globalization of markets and of

production? Would the globalization of production and markets havebeen possible without these technological changes?

3. If current trends continue, China may emerge as the world's largest

economy by 2020. Discuss the possible implications of such a

development for:

The world trading system.

The world monetary system.

The business strategy of European and U.S. based global firms

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PPTs t/a Global Business Today 2e by Hill Cronk and Wickramasekera

Opening Case

Ecuadorian Valentine Roses

A) How has participation in the international rose trade helped

Ecuadors economy and its people? How has the rise of

Ecuador as a centre for rose growing benefited consumers indeveloped nations who purchase the roses? What do the

answers to these questions tell you about the benefits of

international trade?

B) Do you think governments in the developed world shouldplace trade sanctions on Ecuador roses if reports of health

issues among Ecuadorian rose workers are verified? What else

might they do to improve the situation in Ecuador?

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Documents

IBG - 1 Globalisation S2 2014