CGP Factors affecting Globalisation

• Globalisation

  A result of new systems, technology and relationships
• Factors behind globalisation

  • New systems
  • New technology
  • New relationships
• New systems

  Ways, procedures and methods of organisation that allow a particular function
• New technology


  Makes it easier for flows of information and goods to cross national boundaries
• New technology

  • Telecommunications and transport advancements (e.g. internet, aeroplanes)
• New technology and systems allow people and goods to be transported around the world quickly and efficiently
• Financial systems


  Govern the flows of capital between countries
• Investment banks

  Help companies raise capital by selling shares
• Changes in 1980s that made financial system more global

  • Automation technology (e.g. internet) allowed greater access to information
  • New financial products made foreign investment less risky
  • Financial deregulation relaxed rules on what banks could do
• Financial deregulation involved allowing banks to charge more and invest in a greater range of businesses, as well as removing barriers to capital flows
• These changes led to more companies getting involved in finance, and investment banks taking on more services
• Today, the global financial system involves investors and banks all over the world, where decisions in one part can affect companies on the other side of the world
• Trade agreements


  Remove barriers to trade between countries
• Trade controls

  • Tariffs (taxes on imports)
  • Non-tariff barriers (e.g. product quality rules)
  • Banning of certain products
• Trade agreements


  Contracts where countries agree to remove trade controls in exchange for other countries doing the same, benefiting companies and consumers
• Bilateral trade agreements are between two countries, while multilateral agreements involve several countries
• World Trade Organisation (WTO)


  Governs the global trade system, sets rules to stop unfair trade practices and acts as a forum for trade negotiations and dispute resolution
• Transport and communications systems have improved to allow faster and cheaper movement of goods and information globally
• Management and information systems have increased companies' efficiency through global supply chains, economies of scale, and outsourcing
• Globalisation creates trading relationships between countries


  Makes war less likely as countries become interdependent
• Globalisation

  Can also make conflicts more likely, as developed countries intervene in developing countries to secure resources