Business - globalization.

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4 drivers of globalisation:

Market: converging consumer lifestyles and tastes.

Costs: push for economies of scale; more money circulation.

Geo-politics: reduction of trade barriers.

Competition: more companies competing globally; more technological advances.

International Harmonisation: the growing of world's economies, brings a need for international institutions that can coordinate and regulate the activities of government.

They include:

WTO: (World Trade Organization) (1995) free trade, helps to resolve trade disputes.

IMF: (International Monetary Fund) (1945) promote global monetary corporation, stabilise finance, reduce poverty, etc.

WORLD BANK: (1944) promote the development of the poorest countries.

G8: USA, Japan, Germany, France, UK, Italy, Canada, Russia.

OECD: (Organization for Economic Co-operation and Development) (1960) democracy and market economy.

OPEC: (Organization of Petroleum Exporting Countries) (1960) 12-oil producing nations. (World's oil reservation).

International Economic System: more important factor in international business.

Ohlin Theory: "a country's comparative advantages comes from the difference in a nation's factor endowments."

Global Financial Crisis: (GFC)

US central banks - reduce interest rates.

Very cheap to borrow money.

Demand increases, prices skyrocketed.

Could they afford the repayments? No.

Mortgages increased rapidly.

Investment banks failed - bankrupt.

Business debts.

Unemployment.

History of Globalization:

1st Circummvigation: (first sailing) (16th century)

World trade and investment.

Another expansion: WWI (19th century).

The Great Depression.

Joint Venture (JV): alliance between two companies host country (company) and home country. They share the risks, rewards and technology.