GLOBALIZATION

Eka Darmadi Levina Rolanda Tjia May Eka Saputri Chris

INTRODUCTION
Globalization is reshaping our lives and leading us into uncharted territory New technologies drive down the cost of global communication and travel In barriers to trade and investment force the industries to grow more competitive Competitive intensifies seek out customers on a global scale

INTERNATIONAL BUSINESS
Commercial transaction that crosses the borders of two or more nations Import: goods and services purchased abroad and brought into a country Export: goods and services sold abroad and sent out of a country

TECHNOLOGY MAKES IT POSSIBLE

Technology perhaps the most remarkable facilitator of societal and commercial changes today When businesses or consumers use technology to conduct transactions, they engage in e-business (e-commerce) E-business: use of computer network to purchase, sell, or exchange products; service customers; and collaborate with partners

GLOBALIZATION
Trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies A trend characterized by denationalization (national boundaries becoming less relevant) and is different from internationalization (entities cooperating across national boundaries)

GLOBALIZATION
Globalization of markets refers to convergence in buyer preferences in markets around the world The benefits:
Reduce marketing costs Creates new market opportunities Levels uneven income streams Yet local needs are important

Globalization of production refers to the dispersal of production activities to locations that help a company achieve its cost-minimization or qualitymaximization objectives for a good or service The benefits:
Access lower-cost workers Access technical expertise Access production inputs

FORCES DRIVING GLOBALIZATION

Two main forces underlie the globalization of markets and productions: 1.Falling the barriers to trade and investment 2.Technological innovation

Falling barriers to trade investment

General Agreement on Tariffs and Trade: Treaty designed to promote free trade by reducing both tariffs and nontariff barriers to international trade

 World Trade Organization: International organization that enforces the rules of international trade
Regional trade investment : Smaller groups of nations are integrating their economies as never before by fostering trade and boosting cross-border investment. (Example: NAFTA,APEC) Trade and national outputs: With WTO agreements and regional pacts have boosted world trade and cross-border investment significantly.

 GDP(Gross domestic product): Value off all goods and services produced by a domestic economy over a one-year period GNP(Gross National product):Value of all goods and services produced by a countrys domestic and international activities over a one-year period GDP or GNP per capita: Nations GDP or GNP dividend by its population

Technological innovation
E-mail and videoconferencing : Operating across borders and time zone complicates the job of coordinating and controlling business activities. Internet and world wide web : Companies use the internet quickly and cheaply contact managers in distant locations. Company intranets and extranets Intranets: web sites and information networks give employees access to company data using personal computers. Extranets: give distributors and suppliers access to a companys database to place orders or restock inventories electronically and automatically.

 Advancement in transportation technologies : Innovation in the shipping industry is helping globalize markets and production by making shipping more efficient and dependable

Measuring Globalization
4 Variables
Economic integration . Trade, foreign direct investment, portfolio capital flows, and investment income Personal contact . International travel and tourism telephone traffic, remittances. And personal transfers(including compensation to employees) Technological connectivity . Internet users , internet hosts, and secure servers Political engagement . Memberships in international organizations, personnel and financial contribution ton U.N . Security council missions, international treaties tratified, and governmental transfers.

Todays globalization in context

Global economy had finally been reborn Todays globalization are lowering the cost of telecommunications and binding our world more tightly together are the drivers of this second age of globalization-communication satelites, fiber optics, microchips, and the internet .

Introduction to debate
World bank is an agency created to provide financing for national economic development efforts International monetary funds (IMF) is an agency created to regulate fixed exchange rates and enforce the rules of the international monetary systems.

Globalizations impact on job and wages

Against globalization
Eliminates jobs in developed nations Lowers wages in developed nations Exploit workers in developing nations

 For globalization
Increases wealth and efficiency in all nations Generates labor marketing flexibility in developed nations Advanced economies of developing nations Summary of the jobs and wages debate

Globalizations impact on labor the environment, and markets

Labor standarts Trade unions claim globalization reduces labors bargainning power and lowers global standarts when international firms are permitted to continually move to nations with lower labor standarts. Environmental protection . Globalization causes a race to the bottom Future markets . International firms exploit local labor markets and the environmental to produce goods that are then exported back to the home country