Department of Arts and Sciences

BS- Hospitality Management

MODULE 3.
MARKET INTEGRATION

Duration: 3 hours
Intended Learning Outcomes
At the end of this lesson, the students should be able to:

a. Explain the role of international financial institutions in the creation of a global

economy;
b. Identify the attributes of global corporations;
c. Narrate a short history of global market integration in the twentieth century.

DISCUSSION
THREE SECTORS OF ECONOMIC SYSTEM
1. Primary sector-extract raw materials from natural environment

Example:
Mining, forestry, agriculture, hunting, fishing, farming
2. Secondary sector- gains the raw materials and transforms them into manufactured good.

Example:
Manufacturing, construction
3. Tertiary sector- involves service rather than goods. Includes activities which renders
services to the other two sectors. These activities dont produce a good but a support for
the production process.

Example: Professionals, entertainment, transportation, barber shops

 Department of Arts and Sciences
BS- Hospitality Management
International Financial Institutions
 World economies have been brought closer together by globalization. It is reflected
in the phrase “when the American economy sneezes, the rest of the world
catches cold.”
The Bretton Woods System
 Known as the keystone international economic organizations (KIEOs) due to their
central role in trade, development and monetary relations.

Five Key Elements

1. Expression of currency in terms of gold or gold value to establish a par value
2. The official monetary authority in each country would agree to exchange its own currency
for those of other countries at the established exchange rates, plus or minus a one-percent
margin.
3. Establishment of an overseer for these exchange rates.
4. Eliminating restrictions on the currencies of member statesin the international trade.
5. The U.S dollar became the global curency.

International Monetary Fund

promote global monetary cooperation and international financial stability.
provide short-term loan to prevent devaluation and retain the state’s fixed exchange rate
in instances of the temporary balance payment defecits.
its main goal was to help countries which were in trouble at that time and who could not
obtain money by any means.
World Bank
grant long-term loans for the economic development of less developed countires and the
reconstruction of war-torn countries in Europe.
reduce extreme poverty while adressing the imperfections of global capital markets
continues to be secondary imporatnce.
General Agreement on Tariffs and Trade (GATT)
was established in 1947 and it was a forum for the meeting of representatives from 23
member countries.
it focused on trade goods through multinational trade agreements conducted in amy
rounds of negotiation.
its purpose is to avoid trade wars by rasing protectionist barriers as witnessed during the
interwar period.
Word Trade Organization (WTO)
headquartes is located in Geneva, Switzerland with 152 member staes as of 2008.
independent multilateral organization that became reponsible for tarde in services, non-
tariff-related barriers to trade, and other broader areas of trade liberalization.
 Department of Arts and Sciences
BS- Hospitality Management
The Organization for Economic Cooperation and Development (OECD)
the most encompassing club of the richest countries in the world with 35 member states
as of 2016, with Latvia as its latest member.
it is highly influential, despite the group having little formal power.
The Organization of Petroleum Exporting Countries (OPEC)
originally comprised of Saudi Arabia, Iraq, Kuwait, Iran, Venezuela. Thay are still part of
the major exportes of oil in the world today.
was formed because member countries wanted to increase the price of oil, which in the
past had a reatvely low price and had failed in keeping up with inflation.
European Union (EU)
made up of 28 member states.
aim to ensure the free movement of people, goods, services, and capital within the internal
market.
North American Free Trade Agreement (NAFTA)
is a trade pact between the United States, Mexico, and Canada created on January 1,
1994 when Mexico joined the two other nations.
helps in developing and expanding world trade by broadeneing international cooperation.
It also aim to increase the coopeartion for improving working conditions in North America
by reducing barriers to trade as it expands the markets of the three countries.
Global Corporations
Multinational or transnational corporation (MNCs or TNCs)
companies that extend beyond the boarders of one country.
they intentionally surpass national boarders and take advantage of opportunities in
different countries to manufacture, distribute, market, and sell their products.
often locate their factories in countries which can provide the cheapest laborin order to
save up fot expenses in the making of a product.
 Department of Arts and Sciences
BS- Hospitality Management
Acivity 1: “Think and Write”
Answer the following questions: 5 points each.
1. How do economic forces facilitate the deepening of globalization?
2. How is the Philippines central to the history of economic globalization?
3. Compare and contrast the assumptions of the original Bretton Woods system with those
of the Washington consensus.

Activity 2. “Our Economy”

Directions: Within your locality/barangay, take a picture of any economic systems namely:
primary, secondary and tertiary. Afterwards, make a brief explanation on how does this type of
economy helps the people of your community. Note that the pictures must be original so you need
to include yourself from it. (Minimum of 3; maximum of 5 pictures)

***Nothing Follows***