Expanding Globalization
Key Terms: outsourcing, containerization, trade liberalization, free trade, consensus, sanctions
Focus #1
What factors contribute to expanding globalization?
What factors contribute to expanding globalization?
Globalization creates changes in all aspects of people's lives - the kind of work they do, the food they eat, the clothes they wear, what they read, watch, and listen to, and even how they relate to the physical environment. Outsourcing - reducing costs by using suppliers of products and services in less developed parts of the world - is one of the changes that affects the work people do.
Remember the 4 forces of globalization from Chapter 2 - Communication Technology, Trade, Transportation, & the Media...
Remember the 4 forces of globalization from Chapter 2 - Communication Technology, Trade, Transportation, & the Media...
Communication Technologies
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Technological convergence is also increasing the rate of globalization. Cellphones, for example, take photographs, make short videos, store hundreds of recordings, function as personal organizers, capture updates on the latest sports scores via the internet, send e-mails - and still allow you to make phone calls. Convergence also brings together media companies. Today, a newspaper, a textbook publisher, a phone company, a TV network, and a movie production company may all be owned by a single transnational corporation. |
Technology plays an important role in the expansion of global trade. Today, a typical consumer product is designed, developed, manufactured, and assembled by a host of companies, which may be located practically anywhere in the world. Cars and computers, for example, are often assembled only after they have been ordered by customers. This expansion of trade has occurred because countries have opened their economies to outside influences. Governments have allowed foreign products and investment to enter their country. In exchange, businesses and industries in the country have opportunities to sell their goods in international markets. The globalization of trade has been reshaping international trade patterns since 1970. Until then, most goods and services moved between developed -countries in North America, Europe, and the Asia-Pacific region, especially Japan. Developing countries supplied raw materials and bought some manufactured goods. Today, goods and services are flowing more frequently between developing countries, particularly those that are developing quickly, such as South Korea, China, Malaysia, India, and Mexico. And more manufactured goods are also flowing out of developing countries to more developed - and wealthier - countries. |
Trade
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Transportation
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For globalization to operate smoothly, parts and products must be shipped cheaply and in a timely manner. The key to shipping goods more cheaply and efficiently has been containerization - the transporting of goods in standard-sized shipping containers. Containers of goods are shipped along clearly defined routes to large transshipment terminals at strategic locations around the world - Hong Kong, Singapore, New York. The just-in-time delivery and inventory system used today by many manufacturers means that parts are ordered and scheduled to arrive at the factory at the moment they are needed. They are shipped, unloaded from containers, and moved directly onto the factory floor. This saves handling and storage costs because parts no longer need to be kept in warehouses until they are required. |
One way the media contributes to expanding globalization is by running commercials that encourage consumers to buy products. This expands the market for goods and services. The effect of the media becomes even stronger when celebrities - whose influence is boosted by media coverage - lend their names to product lines.
A desire for these products and services also encourages consumers to support government efforts to make it easier for foreign products and services to enter a country. Media convergence has also resulted in the commercialization of news. Former CNN correspondent Charles Bierbauer, for example, said that war is going on in the newsroom - and it is "newsroom versus entertainment." He said the quest for higher ratings often dictates decisions about what news stories are covered. Meanwhile, technological convergence has enabled people to connect in a number of ways. Cellphones, for example, allow people to learn about events and other people's ideas and thoughts, often before mainstream media deliver the story. and if you have a cellphone, it can even make you a part of the media. |
the Media
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Focus #2
How do international agreements and organizations contribute to expanding globalization?
How do international agreements and organizations contribute to expanding globalization?
A key element in expanding globalization is reducing trade barriers so that goods and services can move around the world easily. This process is called trade liberalization. To achieve this goal, countries must get rid of measures - such as tariffs, quotas, regulations, and standards - that protect and regulate businesses and industries within their borders. When two countries agree to eliminate all tariffs and taxes on goods and services traded between them, the result is free trade. In theory, free trade is reciprocal. Businesses and industries in both countries benefit benefit because they can sell their goods and services in the other country. Local companies can expand into new markets. This creates jobs, uses resources, and reduces the cost of consumer goods.
World Trade Organization
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North American Free Trade Agreement
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European Union
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