Workshop 1 assignment
Due January 18, 2011
Submitted January 18, 2011
Modern technology has permanently and dramatically altered the landscape in which businesses operate. Advances in computers and telecommunications have enabled businesses to operate around the clock, reducing the amount of resources wasted, while maximizing efficiency and providing maximum results to shareholders and consumers alike.
What is Globalization?
Globalization refers to the process by which barriers to trade between countries are reduced or eliminated, advances in transportation and communication make distances between countries ...view middle of the document...
Globalization of production refers to the process of manufacturing products in a variety of locations scattered around the globe. An American car manufacturer, such as Ford or General Motors will assemble a car with parts made in other countries. Gone are the days when all of the parts required to produce a car were manufactured in the USA. The sheet metal could be made in the USA, while the brakes are manufactured in Mexico, the electronics manufactured in China, and the engine manufactured and assembled in South Korea. This manufacturing process allows the parts to be made in countries which have a natural or maximum efficiency to produce those parts. This means that the parts can be made for the lowest cost possible, using the local resources, and shipped to the assembly plant to be used in the final assembly. This globalization of production provides the most efficient means of producing quality goods at an affordable price.
The trend towards globalization is a result of two factors. The first factor is the decline of trade and investment barriers between countries. The second factor is the changing role of technology in the means of production, transportation, and communication (Hill, 2009, p. 11). In the beginning of the 20th century, many countries enacted trade barriers in the form of tariffs, levies, and duties imposed on imported goods. The purpose of the barriers were to protect each country’s manufacturing workforce from foreign competition. A result of tariffs on imported goods was that the exporting country would retaliate by imposing tariffs on imports. This would lead to a game of “one-upmanship”, with tariffs inching ever-higher, eventually leading to either a drastic reduction, or even cessation of trade. This choking of international trade eventually depressed world demand, and led to the Great Depression of the 1930s (Hill, 2009, p. 11). After World War II, the leading industrial nations decided to reduce or eliminate restrictions to free trade. One outcome of this effort was the General Agreement on Tariffs and Trades (GATT). GATT was a precursor to the World Trade Organization (WTO), an international consortium comprised of member nations whose goal is to further reduce or eliminate barriers to international trade. Several other organizations whose goals are to promote international trade are the International Monetary Fund (IMF), and the World Bank. The International Monetary Fund was established in 1944, and its purpose is to “maintain order in the international monetary system” (Hill, 2009, p. 10). The World Bank, also created in 1944, is chartered with making low-interest loans to poorer nations wishing to invest in improving their infrastructure. The third organization is the United Nations, established in 1945. The United Nations originally had 51 member countries, but has expanded to include 191 countries, almost every nation in the world (Hill, 2009, p. 11). The second factor in the...