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18 views

Tutorial 1

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chaimeithing0622
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UCSI University

International Business
Chapter 1 (Globalization)

Tutorial 1 Course Code: 304/3023 January 2024

BB 304/BBB 3023 INTERNATIONAL BUSINESS


Chapter 1- Globalization
Chong Jun Sheng 1002265910
Wong Zhi Jing 1002266239
Chai Mei Thing 1002265786
Kuok Mei Yi 1002266553
Chua Jia Ling 1002266022
Koh Huai Li 1002161439
Question 1: Compare the types of companies active in international business.
International company: only engage in export and import activities as well as do investment in
other countries (foreign investment). Independency is high. Less economies scale than global firm.
MCD is not international company. They produce the products and export to other companies.
They don’t have any branches in other countries.
Global company export, import, and set up company in other countries, they sell unique
products. (have branches in other countries). Enjoy less independency in the local market. Enjoy
economies of scale by producing large number of products in suitable situation. Such as Apple, they do
export import, but they also do business in other countries. Producing a product but do not do
any changes in their products. Ex: iPhone 15 is the same in the world. They can control Asian
markets. They do not make changes in their products. Must have company in other countries or
investment. No changes in their products. Ex:Apple
Multinational companies is they also do business in other countries (have branches in other
countries) but they will change their products a little bits based on the country demand.
Companies enjoy more independency in each national market. Companies cannot exploit scale economies
in product development, manufacturing, or marketing. They will follow local culture such as MCD in
Malaysia has nasi lemak but in other countries they so not have the chances to eat nasi lemak.
For example Shampoo 的容量，Malaysia usually has bigger 容量 but in other country the size
not the same as Malaysia because maybe they do not have the ability to buy.
UCSI University
International Business
Chapter 1 (Globalization)

Tutorial 1 Course Code: 304/3023 January 2024

Question 2: “A born global firm engages in international business from or near its inception.”-
Interpret the statement based on your understanding.
International business is a commercial transaction that crosses the borders of two or more
nations. The main objective of international business is to expand the market reach of a company,
increase its revenue, and gain a competitive advantage in the global marketplace. Hence, most of
the global companies want to increase their profit so they will run their business in other
countries. They will set up branches in the country and sell their products in the country.
Question 3: based on the following case study answer the question 3(a).
Economies around the world are becoming strongly integrated. The process of this integration is
not new, as historical data suggests that the very first wave of globalization in the modern era
occurred in 1870 (Mishkin, 2006). However, interdependence and interconnectivity has been
increasing over the past few decades. Multi-dimensional integration among countries around the
world is a result of globalization in which socio-cultural, political, and economic relations are
established across a geographic distance. The world has witnessed an increase in the flows of
trade, investment, capital, and information during the process of integration. Mobility of
individuals across the globe has also increased. Broadly speaking, economic, financial, political,
technological, and social factors have paved the way to globalization. Economic factors i.e.,
lower trade and investment barriers facilitated globalization. Besides, integration and unification
of financial markets around the globe through financial liberalization and deregulation has
increased the mutual dependencies of the economies.
The process of globalization is led by several national and international institutes and countries
in formulating policies. Earlier surge of globalization seems to be highly concentrated among
developed nations (Maddison, 2001). However, the contribution of emerging market economies
in international trade has been increasing significantly in the past few years. Technology plays an
important role in speeding up globalization. It is conceived as a major facilitator and a driving
force in the globalization processes. Technological improvement has allowed companies to
rapidly globalize their products. Multinational food chains can reproduce and standardize their
products across globe through fine connectivity coordinated by technology. The introduction of
universal bar code has increased the movement and flow of goods worldwide.

The creation of personal computers and the internet created electronic business (E-Business) and
electronic commerce (E-Commerce), which are used as a justification of recent techno-
globalism. The modern era of globalization is now experiencing ‘internet economies. It is one of
the necessary components for social globalization, and without the invention of the internet it
would be incomplete. Social factors bring cultural convergence, that is, increasing similarity
UCSI University
International Business
Chapter 1 (Globalization)

Tutorial 1 Course Code: 304/3023 January 2024


throughout the world, through significant reduction in transport and communication cost. Now a-
days the cost of transmitting information is almost negligible, shrinking the world to one single
market. Businesses can sell their products anywhere without investing in or establishing plants in
each one. As a result, societies are moving towards convergence of taste, which is increasing
homogeneity across globe.
Sources: Naz, A., & Ahmad, E. (2018). Driving Factors of Globalization: An empirical analysis
of the developed and developing countries. Business and Economic Review, 10(1), 133-157.
(a) In reference to the above case study identify FIVE (5) forces that drive Globalization.

Lowering Trade Barriers: GATT, WTO, EU, NAFTA and others helped to accelerated business
by addressing trade disputes such as tariff, exchange rate, capital investment. (Besides,
integration and unification of financial markets around the globe through financial liberalization
and deregulation has increased the mutual dependencies of the economies.)
Locate and sell anywhere to anybody: companies engaging in international business now more
easily locate and sell anywhere that makes the most sense for their business by foreign direct
investment. (Businesses can sell their products anywhere without investing in or establishing
plants in each one.)
Global Standard: Standardization of products. So that the products can be sold to everyone.
Global products, Services, and Customers: Despite cultural, economic and political
differences, customers in different countries increasingly want similar products and services.
(Multinational food chains can reproduce and standardize their products across globe through
fine connectivity coordinated by technology.)
The internet: Growth of information technology and the Internet increases the MNC’s ability to
reach customers in a global economy and to manage operations throughout the world. Since any
website can be accessed by anyone with a computer and Internet access, the Internet makes it
easy for companies to go global. (Now a-days the cost of transmitting information is almost
negligible, shrinking the world to one single market)
UCSI University
International Business
Chapter 1 (Globalization)

Tutorial 1 Course Code: 304/3023 January 2024


Question 4: “Many people oppose Globalization”. Explain the main criticisms of
“Globalization” in terms of their impact on the economies, societies, and cultures of developed
and developing countries.
One of the most significant impacts of globalization on developing countries has been economic
growth. As countries have opened up their markets to trade and investment, they have been able
to tap into new sources of capital and technology, which has helped to fuel economic growth.
Another impact of globalization on developing countries has been the rise of multinational
corporations (MNCs). MNCs can bring significant benefits to developing countries, such as new
jobs and access to new technologies. However, they can also have negative impacts, such as
displacing local businesses and exploiting cheap labor.
One area where globalization has had a positive impact on developing countries is the spread of
new technologies. The internet has enabled people in even the most remote parts of the world to
access information and connect with others. It has also created new opportunities for
entrepreneurship and innovation.While the internet has created new opportunities for people in
developing countries, it has also increased the risk of cybercrime and other security threats.
Globalization has also had a significant impact on the environment, both in developed and
developing countries. As economic growth has accelerated, so too have the demands on natural
resources.

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