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Globalisation
the economic integration of different countries through increasing freedoms in the cross-border movement of people, goods/services, technology & finance
Businesses that trade internationally…
import and export goods/services
Imports
goods and serviced bought by people and businesses in one country from another country
Exports
goods and services sold by domestic businesses to people or businesses in other countries
Exports generate…
extra sales revenue for businesses selling their goods abroad
Im-
Changing business locations
Globalisation has also presented opportunities for businesses to relocate to low-cost locations overseas
Businesses may choose to set up production facilities in other countries
This is a different process from choosing a country as a potential market for customers
In this sense, production includes both manufacturing and any services associated with the business e.g. call centres
Multinational corporations (MNC)
a business that is registered in one country but has manufacturing operations/outlets in different countries
Factors such as globalisation(increasing integration of business, culture and experience on a global scale)and deregulation(the process of removing government controls from markets in order to increase competition) have…
contributed to the growth of MNCs
Advantages of MNCs
The MNC can gain access to cheap labour or raw materials
Local residents may benefit from job opportunities and growth in the local economy
MNCs often invest to improve infrastructure
MNCs may have to pay taxes and business rates to local councils/authorities -these funds may be reinvested back into the local community
MNCs can establish charitable initiatives that have a positive effect on the local community
Disadvantages of MNCs
MNCs may cause damage to local habitats/environments during production process
MNCs may leave unsightly production facilities behind once they’ve extracted all of the resources and left the country
