global integration

Created by

Keinth Brian Ewayan

Cards (59)

What is the primary focus of the study material?
Market integration and its implications in the global economy
What assumption is made about students' background in the study material?
Students have a little background on market operations and basic economics
What is the importance of institutions mentioned in the study material?
They play a crucial role in market operations
What are the two international financial institutions mentioned?
World Bank (WB) and International Monetary Fund (IMF)
What are the learning outcomes of the study material?
Narrate a short history of global market integration in the 20th century
Identify attributes of global corporations
Explain the role of international financial institutions in the global economy
Assess different types of market integration
Compare and contrast different forms and types of business
What transformation has occurred since the launch of the World Bank and IMF?
The global economy has undergone significant transformation
What historical events contributed to the rise of American corporations?
WWII destruction and economic recovery led to their rise
What led to a shift towards private, market-based approaches in economic development?
The poor performance of statist models of development
What is market integration?
A situation where separate markets for the same product become one single market
When does market integration occur?
When prices among different locations or related goods follow similar patterns over time
What does market integration indicate?
It explains how much different markets are related to each other
How have traded goods changed over time according to the study material?
Traded goods now go far beyond simple goods
What is the significance of the location of natural resources in production?
It does not determine where to produce goods
What is the role of technology in market integration?
Technologies can be repeatedly reused once discovered
What are the three innovations that changed global corporations in the 1970s-80s?
Digitalization, global communications, and structural transformation of global commerce
What are the three structural periods of globalization mentioned?
Investment-based (1950-1970)
Trade-based globalization (1970-1995)
Digital globalization (1995 onwards)
What has been a major driver of extended global corporate development?
Foreign Direct Investments (FDI)
What changes have occurred in world financial markets over the last few decades?
There has been strong growth of private capital flows to developing countries
What was significant about the year 2001 for the global economy?
It was a turbulent year for the global economy and financial markets
How has foreign direct investment (FDI) impacted development and growth?
FDI has contributed positively to development and growth
What are the objectives of International Financial Institutions (IFIs)?
Poverty alleviation, economic growth, and protection of the environment
What is horizontal integration?
The merger of two or more companies that occupy similar levels in the supply production chain
What is vertical integration?
A competitive strategy where a company takes control over one or more stages in the production or distribution of a product
What is forward vertical integration?
Expanding business activities to include control of direct distribution or supply of a company's products
What is backward vertical integration?
Purchasing or internally producing segments of a company's supply chain
What is a conglomerate?
The combination of two or more business entities engaged in entirely different businesses under one corporate group
What are the advantages and disadvantages of horizontal integration?
Advantages:
Lower costs
Higher power in the market
Reduced competition
Increased differentiation

Disadvantages:
Tough transition change
Lack of competition
What are the advantages and disadvantages of vertical integration?
Advantages:
Doesn’t rely on suppliers
Economies of scale
Retailers know what sells well
Low prices

Disadvantages:
Expense
Reduces flexibility
Loss of focus
Cultural diversity in the workplace
What is a business entity?
An organization that uses economic resources to provide goods or services to customers in exchange for money or other goods/services
What is a service business?
A service type of business provides intangible products with no physical form
What is a business entity?
An organization that uses economic resources to provide goods or services.
What is the primary function of a service business?
To provide intangible products such as skills and expertise.
How does a manufacturing business differ from a merchandising business?
A manufacturing business transforms raw materials into new products, while a merchandising business sells finished products.
What is a hybrid business?
A company classified in more than one type of business.
What are the advantages and disadvantages of a sole proprietorship?
Advantages:
Easy to set up
Control over profits
Pride of ownership
Lower taxes

Disadvantages:
Unlimited liability
Difficulty raising capital
Responsibility for all losses
Limited management knowledge
What is a partnership?
A business owned by two or more persons who share resources and profits.
What are the advantages and disadvantages of a partnership?
Advantages:
Better decision-making
Shared business risk
Easier to form than corporations
Greater capital than sole proprietorships

Disadvantages:
Unlimited liability
Taxed like corporations
Limited life
Potential conflicts among partners
What defines a corporation?
A business organization with a separate legal personality from its owners.
What is a limited liability company (LLC)?
An LLC is a hybrid business form with characteristics of both a corporation and a partnership.
What is a cooperative?
A business organization owned by a group of individuals for their mutual benefit.