International Business

“Chapter 3:Globalization”
Unit 1: Globalization and it’s History

John J.Wild and Kenneth L.Wild

 What is Globalization
• Globalization is the name given to the trend towards greate
r economic, cultural, political, and technological
interdependence among national institutions and
economics. Globalization is characterized by
denationalization.
• The trend towards increasingly freer flow of goods, service,
money, people, and ideas across national borders.
History of Globalization
Unit 2:Drivers of Globalization
 Forces driving globalization
1.Technological Innovation :
Faster and cheaper technology in the digital global ec
onomy of the Internet era has broken the national barrier of tim
e and space, thus, integration of national markets ha
ve been facilitated with ease.
2. Falling barriers to trade and investment:
WTO,IMF,UN,World Bank
 Technological innovation
Innovations in IT and Transportation methods are making it easier , faster and less
costly to move data , goods and equipment around the world . Businesses are
increasingly engaged in e- commerce. e-commerce is just the process of buyin
g and selling produce by electronic means such as by mobile application
s and the Internet.
Advantages to Organizations
•Improves the brand image of the company.
•helps organization to provide better customer services.
•helps to simplify the business processes and makes them faster and efficient.
•reduces the paper work.
Unit 3:Globalization of markets
 Globalization of markets

• It refers to the convergence in buyer preferences

in markets around the world.
 Benefits of Globalization of Markets
• Reduces marketing costs: Companies that sell global products can reduce costs
by standardizing certain marketing activities.
• Creates new market opportunities: A company that sells a global product can
explore opportunities abroad if its home market is small or becomes saturated.
• Levels uneven income streams: A company that sells a product with universal, but
seasonal, appeal can use international sales to level its income stream.
• Local buyers’ needs: In the pursuit of the potential benefits of global markets,
managers must constantly monitor the match between the firm’s products and
markets in order to not overlook the needs of buyers. The benefit of servi
ng customers with an adapted product may outweigh the benefit of a st
andardized one.
Unit 4:Globalization of production
 Globalization of production
• The globalization of production refers to the dispersal of production
activities to locations that help a company achieve its cost-minimi
zation or quality-maximization objectives for a good or service. This inclu
des the sourcing of key production inputs (such as raw material
s or products for assembly) as well as the international outsourcing of se
rvices.
 Benefits of Globalization of Production
• Access lower-cost workers: Global production activities allow companies
to reduce overall production costs through access to low-cost labor.
• Access technical expertise: Companies also produce goods and service
s abroad to benefit from technical know-how.
• Access production inputs: Globalization of production allows companies
to access resources that are unavailable or more costly at home . The
quest for natural resources draws many companies into internation
al markets.
Unit 5:Cons of Globalization
 The Cons Of Globalization-Anti Globalists

• The UN Development Program reports that the richest 20 percent of the

world's population consume 86 percent of the world's resources while t
he poorest 80 percent consume just 14 percent
• It has made the rich richer while making the non-rich poorer.
• Risk of technologies being copied or stolen.
• Incursion of communicable diseases.
• Unemployment and transfer of jobs to lower cost countries.
• MNCs are accused of social injustice, unfair working conditions
(including slave labor wages, living and working conditions)
• Exploits workers in developing countries : Prisoners and child
workers are used to work in inhumane conditions. Safety
standards are ignored to produce cheap goods. There is also
an increase in human trafficking
• Lack of concern for environment, mismanagement of natural
resources and ecological damage.
• Effect on Culture
Thank you