This presentation discusses globalization and its influence on businesses. It defines globalization as the growing integration of the world's economy where economic decisions in one area affect others. There are three key aspects of globalization: increasing international trade, more multinational companies, and businesses thinking globally in their strategies. Globalization can provide both opportunities and threats to businesses by affecting their locations and strategies. Multinational companies operate in multiple countries and can benefit host countries through jobs and technology, but also present challenges like environmental issues. The presentation examines these impacts of globalization and multinational businesses.
2. Key goals:
This topic will discuss the influence of globalization over
business today and the definition of multi-national
corporations.
1. State the definition of globalization
2. State the three important aspects of globalization
3. Explain the main factors which have contributed to the growth of globalization
4. Explain how globalization might affect the location of a business
5. State the influences of multinational companies in the host country
6. Global Strategy
PRESENTED BY Dawood babalejada.
3. Definition Globalization :
Globalization is the growing integration of the world’s economy.
It is suggested that economic decision taken in one part of the
world will affect other parts of the worlds so businesses need to
base their business decision-making on what is happening in the
world market rather than the national market.
4. • There are three important features or aspects of globalization,
which can be seen as follows:
1. The increasing importance o f international trade
2. More and more multinational companies
3. More and more businesses thinking globally about their strategy.
5.
6.
7. • Globalization may have a great deal of influence on many
businesses throughout the world. The impact may be stronger on
some businesses, especially large businesses, but weaker on others.
• There are a number of effects of globalization on businesses.
Some provide opportunities while others may provide threats to
businesses.
• Some major effects of globalization on businesses are seen in the
following table:
9. Globalization and Business
-Multinational companies and their influences
What is a multinational company?
• A multinational company is an organization which owns or controls
production or services facilities outside the country in which it is based.
This means that they do not just export their products abroad, but
actually produce their products in other countries.
• It is commonly understood that a company is called a multinational
company provided it operates in more than four countries.
• Examples of multinational companies are many such as: HSBC, Toyota,
Honda and so on. China’s HEIR is becoming a multinational one.
10. Globalization and Business
-Multinational companies and their influences
Some reasons why a company may become a multinational firm:
1. To avoid protectionist policies on trade, producing in another country
can prevent the tariff or quota restrictions on foreign trade.
2. To realize globalization of the market and enjoy large scale economy.
3. To realize the diversification of markets and spread risks of operation
4. To take advantages of information technology and high speed travel …
• Influences of multinational companies on a host country:
There are some benefits and at the same time some problems
for multinational businesses operating a particular country.
Please see the following table:
11. Globalization and Business
-Influences of multinational companies on a host country:
Problems for a local country:
• Resulting in some local firms to
close plants or cut down
employees
• Affecting the balance of
payments if the multinational
company imports huge amount
of components from other
countries
• Causing difficulties in
government control because of
the strong power of the business
• Causing environmental
problems to the local country
Benefits for a local country:
• Creating new jobs
opportunities
• Improving living standards
for people
• Creating competition for
domestic businesses and
causing them to improve
efficiency
• Bringing new technology
• Bringing new management
ideas and styles
• Improving the balance of
international payments if
exporting.
12. Global Strategy
can be defined as the business strategies engaged by the businesses, companies or firms
operating in a global business environment and serving consumers throughout the world. Global
business strategies are closely related to the business developing strategies adopted by
businesses to meet their short and long term objectives. The short term goals of the business
would be related to improving the day-to-day operations of the company while the long term
objectives are generally targeted towards increment of the profits, sales and earnings of the
company in the long run ensuring growth and stability of the business and dominance over the
national or regional market.
13. This is essentially the point where a global business strategy differs from a national
business development strategy as different other factors such as product
standardization and adaptation come in. The factors of product differentiation and
diversification are relevant in the case of both national and global business
strategy in the wake of rising competition in both the national and international
market. Standardization of production by firms who engage in global business
entails producing the same product for the national as well as the international
markets with only minor changes in attributes. This is mainly explained by the fact
that basic human needs are the same in all countries across the world.
