What is globalisation?
• Globalisation refers to the shift towards a more integrated and interdependent world economy.
• Facets of globalisation
– Globalisation of markets
– Globalisation of production
– Emergence of global institutions
What is globalisation?
• Globalisation of markets
– The historically distinct and separate national markets are merging into one huge global marketplace in which the tastes and preferences of consumers in different nations are beginning to converge on some global norm.
– Examples of consumer products:
Prada fashions, Sony Playstation video games,
McDonald’s hamburgers (US), Nescafé coffee
(Switzerland), Nokia mobile phones (Finland), IKEA furniture (Sweden)
What is globalisation?
• Globalisation of production
– Sourcing goods and services from different locations around the globe in an attempt to take advantage of national differences in the cost and quality of factors of production, thereby allowing them to compete more effectively against their rivals. – Examples of globalisation of production:
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.
The emergence of global institutions • Examples of global institutions (cont’d)
– United Nations (UN) has four purposes:
to maintain international peace and security
to develop friendly relations among nations
to cooperate in solving international problems and promote respect for human rights
to be a centre for harmonising the actions of nations.
