MGT1IB – Introduction to International Business

Class 2 - Chapter 2

Test Your Comprehension (TYC)

1. Is globalisation a recent phenomenon? Describe the four phases of globalisation.

Globalization is not a recent phenomenon. It has been occurring for a decade ago.
 Phase 1: 1830 to 1900 -> Development of railroads, efficient ocean transport, and rise
of large manufacturing and trading companies.

 Phase 2: 1900 – 1930 -> The rise of electricity and steel production.
 Phase 3: 1948 to 1970s -> Formation of General Agreement on Tariff and Trade
(GATT) and WTO. How they trade businesses.
 Phase 4: 1980 to present -> Advances in information, communication, manufacturing
and transportation technologies. IMF (foreign trade) --- World bank (focus on
developing.

2. Summarize the six dimensions of globalisation. Which of these do you think is the most
visible manifestation of globalisation?
S – Social culture
P – Political
E – Environment
T – Technological

3. What are the pros and cons of globalisation?

Pros:
1.
Cons:
1.

Apply Your Understanding (AYU)

1. Imagine you are studying for your international business class at a local coffee shop.
The manager spies your textbook and remarks: “I don’t get all that foreign business
stuff. I don’t pay much attention to it. I’m a local guy running a small business.
Thank goodness I don’t have to worry about any of that.” The manager’s comments
make you think, and you realise there is much more to business than just local
concerns. What is the likely value chain of a coffee shop? For example, how did the
varieties of coffee beans get there? What is the likely effect of market globalisation on
coffee shops? Do technological advances play any role in the shop’s value chain?
Does globalisation imply any negative consequences for the worldwide coffee
industry? Justify your answer.

Value chain: Import coffee beans, furniture. Import coffee beans from another countries, and
buy furnitures (from Ikea – a Sweden company).