Unit 2. Globalization. Factors of globalization. Positive and negative impacts of globalization. Global trade.
Learning objectives
1. Explain what globalization is
2. Describe the processes driving globalization
3. Identify positive and negative impacts of globalization
4. Discuss different constraints limiting the pace of globalization
5. Outline the benefits of going global for a business firm
6. Discuss some of the challenges of managing in a global enterprise
Terms to learn________________________________________________________
Globalization, integration, interaction, IT, standard of living, innovation, human right violations, benefit, in check, outsourcing, consequence, access, accessibility, volatility, vulnerable, vulnerability, challenge, surplus, fluctuation, labor, incentive
Pre-texts discussions
1. How do you understand the term «globalization»?
2. Does globalization bring only positive changes?
3. Why are some countries against globalization?
4. Why do prices fluctuate?
5. How do western countries save money on labor?
6. Does the future of Russia depend on its involvement into globalization processes?
Reading___________________________________________________ __
Text I. Globalization: positive and negative impacts
Globalization is simply the process through which integration and interaction of countries, companies, and people across the globe. The process is as a result of the investment, outsourced manufacturing and international trade. All these are supported by IT, with an aim of bringing economies of various countries together.
Technology is the main drive behind globalization, with enhanced technology leading to rapid increase in globalization over the last century. The accessibility of the internet which crosses national boundaries allows even the smallest of businesses to access immediate global commerce.
Positive impacts of globalization are:
·As western society is becoming more knowledgeable in developing countries, there is greater opportunity for the people in those countries to economically succeed and increase their standard of living
·Increase in competition forces companies to lower their prices
·Increase in media coverage draws the attention of the world to human right violations. It leads to improvement in human rights
·Global competition encourages creativity and innovation and keeps prices for commodities/services in check
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·Developing countries are able to reap the benefits of current technology
·Governments are able to better work together towards common goals
·There is a greater access to foreign culture in the form of movies, music, food, clothing, and more. In short, the world has more choices
Negative impacts of globalization are:
·The benefits of globalization are not universal. The rich are getting richer and the poor are becoming poorer
·Outsourcing, while it provides jobs to a population in one country, takes away those jobs from another country, leaving many without opportunities
·Although different cultures are able to interact and share their ideas and innovations, everything is beginning to meld with a loss of tradition and culture
·There may be a greater chance of disease spreading worldwide, as well as aggressive invasive species that could prove devastating in non-native ecosystems
·There is little international regulation, an unfortunate fact that could have significant consequences for the safety of people and the environment
Text II. Benefits of international trade.
The analysis of the impact of international trade reveals 10 benefits for consumers.
1. Variety of goods. International trade gives access to goods that would not be available otherwise.
2. Outlet for surpluses. Without international trade, a company’s potential market is limited to the population of the country in which it operates. International trade expands the total market size to include every nation with which the country maintains trade relations.
3. Reduction of market fluctuations. In every sector, the market ebbs and flows. The sheer size of the international market helps to mitigate many of the wild fluctuations in sales.
4. Lower costs. The lower cost is the result of two factors. First, companies can produce items overseas, saving money on labor. Second, an increase in competition forces companies to make their products more attractive and cheap.
5. Production efficiency. The increase in competition and price pressure from imported goods forces companies to become more efficient in their production practices and overall operation. Companies achieve better efficiencies in a number of ways. They may include new methods of production or improve the processes they already have in place. They may experiment with new materials, or seek alternative sources for the essential components of their product.
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6. Resource specialization. Large countries like the United States and China have access to almost every resource they need, from minerals to land, and even oil. Smaller nations are not as lucky, and must rely on imports to provide their citizens with basic necessities. International trade allows nations to specialize their economies in the areas where their resources are best allocated.
7. Innovation. Companies must innovate to distinguish their products from increased competition; to improve their cost to consumers; to be first to market with new ideas.
8. Investment. Companies invest in internal R&D to bring new products to market or improve on existing products.
9. Jobs. The chief complaint about international trade agreements is that they take away national jobs, and while the trade agreements did lower opportunities in the manufacturing sector, trade does promote job growth in other areas.
10. Peace. Countries with strong international trade agreements rarely go to war with each other, because the economic and political cost of such a decision would be devastating. International trade creates interdependency and an incentive to find peaceful, diplomatic solutions to international conflicts, rather than military solutions.
Vocabulary test_______________________________________________________
1. Globalization includes … of goods and services across borders of the countries.
A) flowsB) flaws C) streams D) steams
2. The … between economic growth and globalization is a focus of attention by many researchers.
A) bundle B) binding C) blink D) link
3. The process of globalization helps to use economic … more efficiently.
A) capacity B) involvement C) interference D) introduction
4. Less developed countries stand to gain more in this ….
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A) attitude B) approach C) ratio D) respect
5. Global competition encourages creativity and keeps prices ….
A) in vain B) in order C) in checkD) out of order
6. MNCs have an interest in applying clean technologies to ensure that there is no … to their reputation.
A) injury B) damage C) loss D) lack
7. Global trade reduced the cost of living and created new jobs with higher ….
A) rewards B) loans C) wages D) premiums
8. The rebound in global trade … to stronger economic growth.
A) threatened B) influenced C) affected D) contributed
9. Globalism is a removal of national sovereignty and establishing … Europe and world government.
A) unified B) separated C) detachable D) particular
10. Globalization is on the … and companies are spreading out all around the world, no longer restricted by geographical barriers.
A) race B) rate C) rice D) rise
Translating___________________________________________________________
Use the following words in translation:
· Threat -угроза
· To reinforce – усиливать
· To promote – способствовать
· Efforts-усилия
· Enhancing - повышение
1.Большинство определяет глобализацию как процесс интеграции экономических систем мира.
2.Менеджеры должны понимать смысл глобальных процессов, так как происходящие изменения создают огромное количество возможностей, сложных задач и угроз для бизнеса.
3.Преимущества используются для того, чтобы расширить бизнес за пределы национальных границ.
4.Даже если предприятие не вышло на международный рынок, то на него могут отрицательно повлиять те ключевые игроки, которые вошли и конкурируют на внутреннем рынке.
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5.Барьеры, препятствующие международной торговле и инвестициям, будут уничтожаться, новые рынки возникнут в развивающихся странах.
6.Уровень взаимодействия развивающихся стран с экономически высокоразвитыми странами варьируется и зависит от многих факторов.
7.Даже если доход продолжает расти, а меры по поддержке населения улучшаются, люди чувствуют себя незащищёнными из- за постоянных изменений в жизни.
8.Волатильность и скорость – главные черты глобализации.
9.Негативное влияние глобализации в том, что она усиливает политическую нестабильность, так как способствует изменениям, а это - дополнительный стресс для уязвимых экономических систем.
10.Усилия нацелены на улучшение благосостояния и повышение уровня жизни людей.
Defining the terms_____________________________________________________
| 1. integration | a) the process of constant changing |
| 2. challenge | b) stimulating task or problem |
| 3.fluctuation | c) rapid and unpredictable change |
| 4.incentive | d) ability to be easily hurt, influenced, or attacked |
| 5.outsourcing | e) buying goods or services instead of producing them |
| 6.volatility | f) thing that motivates or encourages someone |
| 7.vulnerability | g) process of combining two or more things |
Writing______________________________________________________________
1. On today’s business there are many global mega corporations, such as McDonald’s, Marriot, Disney, Hertz and others. Discuss how they influenced and affected the life of many people in the world.
2. International trade results in higher levels of consumption and investment, lower prices of commodities, and a wider range of product choices for consumers. What are the arguments of those who are against it?
Chapter II
Corporate strategy and HRM
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