Factors Contributing to Globalisation

Causes of Globalisation

There are numerous causes of globalisation. All of these causes have played different roles at different times in history to further promote globalisation.

Technological advancements

Mobile phones and the Internet have promoted globalisation.
The Internet has removed physical barriers to trade.
This has had two different effects:
- It has allowed firms in a country to access a much larger market - leading to economies of scale advantages, price falls and consumer surplus rises.
- It has also allowed consumers to have more choice. Now, consumers can buy from more firms in more countries. So there is more competition and prices have fallen.
Travel between countries is also now easier thanks to technological advancements.

Containerisation

Containerisation and huge tanker ships has seen firms exploit volume economies of scale.
This has promoted the international trade of goods by making shipping cheaper.

Growth in WTO membership

The role of the World Trade Organisation (WTO) is to liberalise free trade, to provide a forum to resolve trade disputes, and to lower tariff barriers.
The GATT (General Agreement for Tariffs and Trade) was formed in 1948.
As a result of the Uruguay Round in 1995, the WTO was formed.
The Most Favoured Nation Principle (MFN) says that any tariff reduction offered to one country must be offered to all (against trade discrimination).
The WTO began with 23 members, and now has 163 members.

Causes of Globalisation (Cont.)

There are numerous causes of globalisation. All of these causes have played different roles at different times in history to further promote globalisation.

Growth of free trade blocs

Free trade blocs are typically groups of countries that do not have any trade restrictions (e.g. tariffs, quotas) between them.
The European Union is a Customs Union – this means it has a Common External Tariff (CET). There are no tariffs between countries, but a CET for countries outside the union.

Deregulation

Financial markets de-regulated in the 1980s/90s.
Former communist economies liberalised in late 1980s/90s.
Deregulation allows huge flows of hot money and foreign direct investment (FDI) internationally.
Growth of cross-border FDI (vertical, horizontal, conglomerate integrations/mergers).

Growth of BRICS

The 'BRICs' economies are Brazil, Russia, India, China and South Africa.
These emerging economies have, for the most part, become increasingly integrated into the world economy.
China, in particular, has opened up to trade.

Growth of sovereign wealth funds

A sovereign wealth fund (SWF) is a state-owned investment fund composed of financial assets such as stocks, bonds and other such property which invest huge sums globally.
SWFs are typically created when governments have budgetary surpluses.
SWFs are driven (though not exclusively) by commodity-rich countries such as Qatar, which 'owns' Canary Wharf, The Shard and Harrods!

1Exploring Business

2Marketing Campaigns

2.1Marketing

2.1.1Setting Marketing Objectives

2.1.2Customer Needs

2.1.3The Market

2.1.4Competition & The Market

2.1.5Consumer Behaviour

2.1.6Market Research

2.1.7Forms of Market Research

2.1.8Market Segmentation

2.1.9Cultural & Social Factors in Marketing

2.1.10Promotional Decisions 3

2.1.11Pricing Strategies

2.2Marketing Mix

2.2.1Marketing Mix

2.2.2Product Life Cycle

2.2.3Pricing Decisions & Price Skimming

2.2.4Pricing Decisions & Price Penetration

2.2.5Promotional Decisions

2.2.6Promotional Decisions 2

2.2.7Promotional Decisions 3

2.2.8Market Mapping

3Business Finance

3.1Sources of Finance

3.1.1Internal Finance

3.1.2External Finance

3.1.3External Finance 2

3.1.4Sources of Business Finance

3.2Financial Planning

3.2.1Revenue

3.2.2Costs

3.2.3Cash & Cash Flow

3.2.4Cash & Cash Flow 2

3.2.5Break-Even Analysis

3.2.6Profits

3.3Financial Statements

3.3.1Balance Sheets

3.3.2Income Statements

3.3.3Liquidity

4International Business

4.1Globalisation

4.1.1Growing Economies

4.1.2Specialisation & Trade

4.2International Business

4.2.1Internationalisation

4.2.2International Trade

4.2.3MNCS

4.2.4Conditions that Prompt Trade

4.2.5Assessment of a Country

4.3International Economic Environment

4.3.1Globalisation

4.3.2Factors Contributing to Globalisation

4.3.3Protectionism

4.3.4The EU & the WTO

4.3.5Trading Blocs

4.4Factors Affecting International Business

4.4.1Global Competitiveness

4.4.2Ethics of Global Business

4.4.3Controlling MNCs

4.4.4Cultural & Social Factors in Marketing

5Principles of Management

5.1Management & Leadership

5.1.1Managers

5.1.2Management Theories

5.1.3Managing Organisational Culture

5.1.4Management Style

5.2Theories of Motivation

5.2.1Motivating & Engaging Employees

5.2.2Taylor's Theory

5.2.3Mayo's Theory

5.2.4Maslow's Theory

5.2.5Herzberg's Theory

5.3Managing Change

5.3.1Change

5.3.2Key Factors in Change

5.3.3Scenario Planning

5.3.4Managing Change

5.3.5Managing Strategic Implementation

6Business Decision Making

6.1Business Principles & Practices

6.1.1Influences in External Environments

6.1.2Product Decisions

6.1.3Competitive Environment

6.1.4Corporate Strategy

6.1.5Quantitative Sales Forecasting

6.1.6Legislation

6.2Quality Management

6.2.1Importance of Quality

6.2.2Measuring Quality

6.2.3Total Quality Management

6.2.4Evaluating TQM

6.3Human Resources

6.3.1Contracts

6.3.2Recruitment

6.3.3Training a Workforce

6.4Documents & Business Decisions

6.4.1Sales Forecasts

6.4.2Managing Strategic Implementation

6.4.3Problems with Strategy

Jump to other topics