ch. 1 vocab

National economies are merging into an interdependent, integrated global economic system.

globalization

international trade

the exchange of goods, services, and capital between countries.

import tariffs

Taxes levied on imports

Why is globalization important to business?

world is seen as market, interconnectedness of global economies, Locate production in the most cost-effective, Potential disruptions in supply chain

International business

International business

Multi-national enterprises

any business that has productive activities in 2 or more countries

Technological changes and Globalization

A fundamental shift in the world economy - interconnectedness

Globalization of markets

view the world, rather than a single country, as their market

Globalization of Production

base production in the optimal location for that activity – connection with the local consumer

factors of production

labor, energy, land, capital

Globalization of Markets

the merging of historically distinct and separate markets into one huge global

marketplace

Globalization of Production

Sourcing goods and services to capitalize on national differences in costs and quality

outsourcing

business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in house by the company’s own employees and staff