He called these factors the flatteners to denote the premise of the book that these factors were responsible for the flattening of the world. Globalization has been shaped and driven by many factors over the last few decades. Results of dynamic ordinary least square show human capital, capital, labor, transportation and communication and financial index as the important drivers of globalization in both developed countries and full sample. The sidebar below groups globalization factors into four categories. If you continue browsing the site, you agree to the use of cookies on this website. Identifying the drivers of economic globalization and the. Drivers of globalization two factors underlie globalization decline in barriers to the free flow of goods, services, and capital that has occurred since the end of world war ii technological change. But the technological basis for the phenomenon of globalization implies that, barring an end to the pax americana or else extremely vigorous conscious actions to reverse the process, globalization is here to stay. Generally there are four major categories of globalization drivers. Commodities and manufactured goods are already in a globalized state.
Shiva ramu the major drivers or factors of globalization are read more. The globalization of customer needs and the opportunities for scale and standardization it brings will fundamentally alter the economics of many industries. The four main areas of drivers for globalisation are market, government. The objective of this study is to contribute to the understanding of how globalization affects the competitive environment of companies. Drivers of the recent wave of globalisation economics essay. As the fourth industrial revolution drives a new phase of globalization globalization 4. The most prominent driver of this trend is the advancement of technology. What are some major regional trading blocs and specify at least two in your region of interest.
Globalization has also been driven by technology, including use of the internet, mobile phones and satellitetracking technology. International marketing strategies for global competitiveness. The famous author and cheerleader for globalization, thomas friedman, in his book the world is flat identified some key drivers of globalization. Drivers of globalization globalization transcends the barrier among the countries in the aspects of technology, language, economy, culture and other resources and brings them at the same platform. Generally, organizations go global for expanding their markets and increasing their sales and profits. Hello my name is teresa and i just wanted to send you a quick message here instead of calling you. Cost globalization drivers scale or scope economics, experience effects, sourcing efficiencies, and technology advantages that shape the economics of an industry. Aug 15, 2017 but as a matter of fact, the development of globalization is not determined by any laws of nature. Maximizing their investment is a motivator for many global companies. In the present era, it has become easy to distribute information to any. Globalization is driven by various new development and gradual changes in the world economy.
What are the drivers behind economic globalization. Technology shaped and set the foundation for modern globalization. While some industries, including paper and soft drinks, are truly globally contested, some others, such as government procurement, are still closed. Abstract most definitions of globalization focus on its impact on world trade and the flow of capital and other factors of. Part 44 professor michael czinkota page and noticed you could have a lot more hits. S, japanese, and western european companies investing in europe, asia. Multinational corporations concentrate vast resources, and become the main carriers of economic activity on a global level. Introduction, drivers benefits of international business. Four dimensions of globalization flashcards quizlet. Meat queens globalization success can be linked to numerous key drivers of the overall process. Impact of globalization on model of competition and. Together, these four sets of drivers cover all the major critical industry conditions that affect the potential for globalization. Theoretical perspectives, impacts and institutional response of the economy 265 role of the nationstate in this context is also significantly diminishing. In general, three factors have been identified as the main drivers of this process.
The natural types of business globalization are there any drivers able to upset this apparently stable situation. The drivers of globalization are the reduction of barriers to international trade, increased consumer demand, lowered costs of shipping and production, and. Cost globalization drivers open textbooks for hong kong. With each passing year, the speed at which transactions take place and the spreading influence of cultural forces serve to integrate international societies. Drivers of globalization there are two main drivers of globalization which seem to underlie the trend towards greater globalization. But as a matter of fact, the development of globalization is not determined by any laws of nature. The driving forces of globalization includes economic, political and technological factors, establishment of wto, emergence and growth of regional integration, decline in trade barriers, decline in investment barriers, technological changes, increase in fdi and growth of mncs. Type 2a globalization is a globalization of financial capital. In case such polices create a favorable environment, international trade is highly practiced and globalization becomes inevitable. Political decisions and institutions are central adjustment screws. It is, hence, useful to identify a number of key drivers, which affect the structure of economies and markets.
Globalization drivers ultra luxury car industry luxury car industry there are four different kinds of levels in the luxury car industry. Nonetheless, the four global drivers have affected countries and industrial sectors differently. Drivers of globalization essay 360 words antiessays. Globalization has potential downsides, along with its benefits, says rutgers john dunning. Economic globalization stands for the economic interconnectedness of countries with the global economy as a whole. Following increase of trade between different countries, interaction between people increases leading to globalization. His academic interests are connected with the analysis of problems of globalization and modernization. The evidences also suggests that fdi is playing an increasing role in the global economy as firms increase their cross border investments. One of the concerns of the current period of globalization is its connection to unequal distribution of wealth within and between countries. Impact of globalization on model of competition and companies. Jul 11, 2011 hello my name is teresa and i just wanted to send you a quick message here instead of calling you. Yip, it is possible to define globalization drivers in four areas. Singlenation markets might not be large enough to offer a companys country subsidiaries all possible economies of.
The media and almost every book on globalization and international business speak about different drivers of globalization and they can basically be separated into five different groups. Government drivers private capital flows to ssa have increased almost fivefold since 2000 for the first time in 2006 they overtook official aid flows. Industry globalization drivers there are four broad groups of industry globalization drivers market, cost, government and competition table1 below. Globalization has changed the world and the competitive situation of companies, and has affected us as individuals. Rangarajan outlines the concept of economic globalization and its problems. These external drivers affect the main conditions for the potential of globalisation across industries, which are mainly uncontrollable by individual firms.
As the global economy shifts, there are new factors threatening to weigh on development. Economies of scale and scope, experience effects, and exploiting differences in factor costs for product development, manufacturing, and sourcing in different parts of the world will assume. There are many types of market drivers, but they all hold in common a convergence of global trends and economic ecosystems. What are five major kinds of drivers for globalization of firms. There are four broad groups of industry globalization drivers market, cost, government and competition. Ironically, the drivers of globalization have also given rise to a greater level of imports. In the global economic growth and development you should understand internal and external links and factors. If we look at the positive effects of globalization, there are four main benefits that it has brought us, and many people tend to. International business by its nature is the primary determinant of international trade, 1 of the results of the increasing success of international business ventures is globalization. The primary drivers of globalization are rapid advancements in technology, culture, economics and politics. Concept and concerns writing for the hindu, indias national newspaper, c. The drivers and effects of globalization are here evaluated in terms of their impact on the model of the five forces of competition. Writing for the hindu, indias national newspaper, c.
First is the decline in barriers to the free flow of goods, services and capital that is occurred since the end of world war ii. During each phase of globalization, technology has played a defining role in shaping both opportunities and risks. Market globalization drivers cost globalization drivers government globalization drivers competitive globalization drivers. Importing the sale of products or services in one country that are sourced in another country. The first factor is the benefit of technological innovation, which. Globalization studies and editorinchief of the journal age of globalization in russian.
List the major drivers of globalization and give three. Economic globalism involves longdistance flows of goods, services and capital and the information and perceptions that accompany market exchange. My colleague alison bass will soon fill you in on paul saffos and martin. With each passing year, the speed at which transactions take place and the spreading. His published research includes topics such as forecasting world political change, socialeconomic development and social evolution. Drivers are primarily uncontrollable by the worldwide business. Cio wow, two braintickling hours of input from some brilliant speakers.
The drivers and effects from globalization are identified and defined, and their impact on. Oct 27, 2009 yips globalization drivers slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. From climate change to populism and automation, these are the new rules of the global economy. The drivers of globalisation are a combination of many factors which have lead businesses to look outside their domestic markets for growth opportunities 4. Globalization certainly permits an increase in the level of global output. The fourth industrial revolution is driving globalization. Competitive globalization drivers are inclusive of high levels of imports and exports. Explain at least four effects of globalization that impact your community and your organization.
One of the major forces of globalization is the expansion of communication systems. The levels divide the actors of the market into different levels depending on their grade of luxury. Available under creative commonsnoncommercialsharealike 4. List the major drivers of globalization and give three examples of each. Globalization has become a way of life in 21stcentury business, as transportation, communication and technology have decreased distances and have increased the speed of transactions across broad geographic areas. Faster and cheaper technology in the digital global economy of the internet era has broken the national barrier of time and space, thus, integration of national markets have been facilitated with ease. Integration of theories and models markus bauernfeind essay economics international economic relations publish your bachelors or masters thesis, dissertation, term paper or essay. Professor and chair department of management, marketing and information systems school of business and public administration university of the district of columbia washington, d. Yip identifies four sets of industry globalization drivers that underlie conditions in each industry that create the potential for that industry to become more global and, as a consequence, for the potential viability of a global approach to strategy.
The fourth industrial revolution is driving globalization 4. In fall 1997 he was a visiting fellow at the kellogg institute. What make this phenomenon more complex are the contradictory justifications on the origin of globalization, conflicting ways of defining the. Mar 02, 2011 the evidences also suggests that fdi is playing an increasing role in the global economy as firms increase their cross border investments. An evolutionary perspective on firmstate relations in the asian newly industrialized economies article pdf available january 2009 with 4,575 reads how we measure. Yip s framework developed by george yip1992 helps analyze the degree of globalization in the industries the 4 main categories of drivers are. Globalization drivers market drivers cost drivers government drivers competitive drivers market globalization drivers common customer needs global customers global market channels transferable marketing measures. Lower trade barriers affect the geographic barriers, both in opening up toward similar. Globalization in this sense is a very strong flattener.
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