MA MANAGING GING IN A A GL GLOBA BAL L EN ENVI VIRO - PowerPoint PPT Presentation

MA MANAGING GING IN A A GL GLOBA BAL L EN ENVI VIRO RONMENT NMENT Lecturer: Chandana Fonseka

GLOBALISATION • Gl Glob obal alization ization can an be be def defin ined ed as as the the gr growin ing int nterde depen pende dences nces of of coun countr trie ies worl rldwid wide. • It refers to the extent to which the following are shared or carried out among countries: – Cross border transactions in goods and services  Intern ernati ationa onal trade de – International capital flows  Investment tment sharin ring – Social and cultural idea  Cultura ural sharing ring – Spread of technology  Techno hno transf nsfer er $16 trillion worth of goods – Politic tical al corp rporati orations ns are merchandised annually ( value of world trade) at a growth of 4% annually (in 2016)

20/6/2016 20/6/2016 GDM GDM M 401 PB: HDM M 401 PB: HDM

Ref Page 108 Getting Started Internationally Exporting Outsourcing Licensing Direct investments

Ref Page 108 Getting Started Internationally 1. Exporting Locally produced items are traded in overseas markets Large Exporters  USA , China, Germany, UK and Hong Kong Large Importers  China , USA, Germany, Japan and France Main trading items: Oil, Electronics, Machines and vehicles

Ref Page 108 Getting Started Internationally Locally produced items are traded in overseas 1. Exporting markets Work activities are done in overseas 2. Outsourcing countries – use the advantage of cheap labour and cost effective operations Offshore vendors are outside of the company’s own country. One country uses certain resources such as technology, managerial skills, patents, etc. in Nearshore vendors are in countries that neighbor the contracting company’s another country (Franchising is a type of licensing) own country. Onshore vendors are within a contracting company’s own country, although Investing in facilities in foreign they may be located in a different city or state. countries. Include strategic alliances, partnerships Currently there are more than 300 IT and BPO companies in Sri Lanka. These companies provide Sri Lanka was awarded the prestigious employment to more than 75,000 “Offshoring Destination of the Year” award people bringing in revenue of more by the National Outsourcing Association than US$600 million in exports. (NOA), UK on 23rd of October 2013

Ref Page 108 Getting Started Internationally One country uses certain resources such as 3. Licensing technology, managerial skills, patents, etc. in another country (Franchising is a type of licensing) In 2017, SPAR International granted a licence to Ceylon Biscuits Limited (CBL Group) to operate the SPAR Brand as SPAR Sri Lanka in a joint venture with the SPAR Group Ltd South Africa. SPAR Sri Lanka has announced plans to open 20 SPAR Supermarkets within a five-year period; combining both convenience and neighbourhood stores to meet market needs.

Ref Page 108 Getting Started Internationally 4. Direct investing Investing in facilities in foreign countries. Include strategic alliances, partnerships FDI’s in SL in 2017 was US$1.63bn Discuss 5 broad factors More FDIs came from China, Hong Kong, which directly impact on Singapore and India the growth of FDIs?

Factors Driving Globalization  i.e. Inter-depending  Development of Technology (e.g. transportation)  Improved communication  Political realignments (e.g. EU)  Specialization (E.g. Saudi oil)  Efficiency and lower costs  Choices (e.g. Cosmopolitanism consumers)

Factors Driving Globalization