Economic Environment of Business Globalisation.

What do we mean by globalisation? May mean different things to different people: Economists Rise in international trade or capital flows Politicians Process undermining the nation state Sociologists Global culture and media Or – The emergence of global conflict?

What are the key elements of globalisation? Shrinking space (beyond national boundaries) Shrinking time – immediate impacts via improving communications Disappearing borders – regional blocs etc.

Global integration may be shallow or deep: Exchange of foodstuffs/materials for manufactured/finished goods Or: MNCs and fragmented production process via geographical relocation = cross-border, value-adding activities

Globalisation Tendencies New markets, including deregulation New actors (MNCs) New rules, norms – human rights, environment etc. New(faster) communication modes Increase knowledge – greater global openness

Globalisation and Corporate Strategy: Changing industry structure from technology change Privatisation and deregulation Internet technology Environmental and economic pressure groups increasingly well organised

Other key issues Sovereignty Centralisation v decentralisation Threats to the nation state Autonomy Authority Legitimacy

Negative aspects of globalisation? International terrorism and criminality 9/11 and World Trade Centre & 7/7/05 in London Increased spread of illness SARS / Bird Flu Development of anti-global movements Call for sustainable trade/liberalisation “Americanisation” and US cultural influence

Summary New markets New actors New norms and rules We established: Globalisation is a process characterised by changes in: New markets New actors New norms and rules New methods of communication change in corporate strategy Challenge to national sovereignty Discontinuous competitive landscape Multi-dimensional aspects of globalisation