Economic Environment of Business

1
Economic Environment of Business

• Globalisation.

2
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?

3
What are the key elements of globalisation?

• Shrinking space (beyond national boundaries)
• Shrinking time immediate impacts via improving
  communications
• Disappearing borders regional blocs etc.

4
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

5
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

6
Globalisation and Corporate Strategy

• Changing industry structure from technology
  change
• Privatisation and deregulation
• Internet technology
• Environmental and economic pressure groups
  increasingly well organised

7
Other key issues

• Sovereignty
• Centralisation v decentralisation
• Threats to the nation state
• Autonomy
• Authority
• Legitimacy

8
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

9
Summary

• 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