Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Sunil Kumar
Professor of International Business
To understand globalisation
To analyse drivers of globalisation
To understand phases and stages of
globalisation
To analyse advantages of
disadvantages of globalisation
To analyse international business
environment (PESTLE Analysis)
Globalization is a process of interaction
and integration among the people,
companies, and governments of different
nations, a process driven by international
trade and investment and aided
by information technology.
This process has effects on
the environment, on culture, on political
systems, on economic development and
prosperity, and on human physical well-
being in societies around the world.
Technological
drivers
The Drivers of
Globalization
Competitive
Cost drivers
drivers
Technology shaped and set the foundation for
modern globalization. Innovations in the
transportation technology revolutionized the
industry.
The most important developments among these
are the commercial jet aircraft and the concept
of containerisation in the late 1970s and 1980s.
Inventions in the area of microprocessors and
telecommunications enabled highly effective
computing and communication at a low-cost
level.
Finally the rapid growth of the Internet is the latest
technological driver that created global e-
business and e-commerce.
Liberalized trading rules and deregulated
markets lead to lowered tariffs and allowed
foreign direct investments in almost all over
the world.
The institution of GATT (General Agreement
on Tariffs and Trade) 1947 and the WTO
(World Trade Organization) 1995 as well as
the ongoing opening and privatization in
Eastern Europe are only some examples of
latest developments.
As domestic markets become more and more
saturated, the opportunities for growth are
limited and global expanding is a way most
organizations choose to overcome this situation.
Common customer needs and the opportunity
to use global marketing channels and transfer
marketing to some extent are also incentives to
choose internationalization.
Sourcing efficiency and costs vary from
country to country and global firms can take
advantage of this fact.
Other cost drivers to globalization are the
opportunity to build global scale economies
and the high product development costs
now-a-days.
With the global market, global inter-firm
competition increases and organizations
are forced to “play” international.
Strong interdependences among
countries and high two-way trades and
FDI actions also support this driver.
Domestic stage: market potential is limited to the home
country production and marketing facilities located at
home
International stage: exports increase company usually
adopts a multi-domestic approach
Multinational stage: marketing and production facilities
located in many countries more than 1/3 of its sales outside
the home country
Global (or stateless) stage: making sales and acquiring
resources in whatever country offers the best opportunities
and lowest cost ownership, control, and top management
tend to be dispersed
Free flow of capital, technology
Industrialization
Production facilities throughout the world
Increase in production and consumption
Lower prices and high quality
Jobs and Incomes
Higher standard of living
Balanced Human development
Welfare and prosperity
Kills domestic business
Exploits human resource
Unemployment and underemployment
Widening gap between rich and poor
Transfer of natural resources
National sovereignty at stake
Commercial and political colonialism
International
business is management of
business operations conducted in more than
one country
Fundamental tasks do not change
Basicmanagement functions are the same -
domestic or international
Greater difficulties and risks when performing
on an international scale
P – Political
The current and potential influences from political pressures
E - Economic
The local, national and world economic impact
S - Sociological
The ways in which changes in society affect the project
T - Technological
How new and emerging technology affects our project /
organization
L - Legal
How local, national and global legislation affects the project
E - Environmental
Local, national and global environmental issues
Government type and stability
Freedom of the press, rule of law and
levels of bureaucracy and corruption
Regulation and de-regulation trends
Social and employment legislation
Tax policy, and trade and tariff controls
Environmental and consumer-
protection legislation
Likely changes in the political
environment
Stage of a business cycle
Current and projected economic growth,
inflation and interest rates
Unemployment and supply of labor
Labor costs
Levels of disposable income and income
distribution
Impact of globalization
Likely impact of technological or other
changes on the economy
Likely changes in the economic
environment
Cultural aspects, health consciousness,
population growth rate, age distribution,
Organizational culture, attitudes to work,
management style, staff attitudes
Education, occupations, earning capacity,
living standards
Ethical issues, diversity,
immigration/emigration, ethnic/religious
factors
Media views, law changes affecting social
factors, trends, advertisements, publicity
Demographics: age, gender, race, family size
Maturity of technology, competing
technological developments, research
funding, technology legislation, new
discoveries
Information technology, internet, global and
local communications
Technology access, licensing, patents,
potential innovation, replacement
technology/solutions, inventions, research,
intellectual property issues, advances in
manufacturing
Transportation, energy uses/sources/fuels,
associated/dependent technologies, rates of
obsolescence, waste removal/recycling
Current home market legislation, future
legislation
European/international legislation
Regulatory bodies and processes
Environmental regulations, employment law,
consumer protection
Industry-specific regulations, competitive
regulations
Ecological
Environmental issues, environmental
regulations
Customer values, market values,
stakeholder/ investor values
Management style, staff attitudes,
organizational culture, staff engagement