Globalisation Key Terms

Globalisation

Increasing interconnectedness of places around the world

• 4 main flows = movement of people, commodities, capital, information

Glocalisation

When TNC’s adapt products to suit particular markets → boost sales

Suit local cultures so markets aren’t alienated

Free Trade

Movements of goods internationally with no tariffs, subsidies and quotas

GPN

Global Production Network

Chain of connected supplies allow for assembly of consumer goods - international scale

Outsourcing

TNC employs different company as part of manufacturing process eg. Where labour costs are lower

SEZ

Special Economic Zone

Geographical areas where government offers incentives to attract TNCs + FDI eg. China

Privatisation

Transfer of assets from govts to private sector

‘Shrinking World Effect’

Due to transport developments distant places feel close + take less time to reach

Trade blocs

Groups of countries where they agree preferential trade deals eg. EU

NAFTA

North American Free Trade Agreement - trade bloc

Now replaced by UMSCA

ASEAN

Association of South East Asian Nations - trade bloc

FDI

Foreign Direct Investment - investment in business by an investor from another country

Foreign Acquisitions

(Type of FDI)

TNC launches take over of company in another country eg. 2010 Cadbury taken over by Kraft US

Transfer Pricing

(Type of FDI)

Some TNCs channel profits through subsidising company in low tax company eg. Amazon + Ireland

-OECD trying to limit this

Foreign Mergers

(Type of FDI)

2 firms in different countries join forces to create single entity eg. Royal Dutch + Shell

Offshoring

(Type of FDI)

Moving part of company’s production process TO another country eg. JCB in India

TNC

Trans National Company - company that manufactures product in one country + sells in another

Neoliberalisation

Lessening of government regs. to encourage investment → in theory leads to trickle down

JIT

‘Just in time‘

Products are only delivered when needed for a company, saves storage costs eg. BMW Mini