MA MANAGING GING IN A A GL GLOBA BAL L EN ENVI VIRO - - PowerPoint PPT Presentation

MA MANAGING GING IN A A GL GLOBA BAL L EN ENVI VIRO RONMENT NMENT

Lecturer: Chandana Fonseka

GLOBALISATION

• Gl

Glob

• bal

alization ization can an be be def defin ined ed as as the the gr growin ing int nterde depen pende dences nces of

• f coun

countr trie ies worl rldwid wide.

• It refers to the extent to which the following are shared or carried out among

countries: – Cross border transactions in goods and services  Intern ernati ationa

• nal trade

de – International capital flows  Investment tment sharin ring – Social and cultural idea  Cultura ural sharing ring – Spread of technology  Techno hno transf nsfer er – Politic tical al corp rporati

• rations

ns

$16 trillion worth of goods are merchandised annually (value of world trade) at a growth of 4% annually (in 2016)

20/6/2016 GDM M 401 PB: HDM 20/6/2016 GDM M 401 PB: HDM

Getting Started Internationally

Exporting Outsourcing Licensing Direct investments

Ref Page 108

Getting Started Internationally

• 1. Exporting

Locally produced items are traded in overseas markets Ref Page 108 Large Exporters  USA, China, Germany, UK and Hong Kong Large Importers  China, USA, Germany, Japan and France Main trading items: Oil, Electronics, Machines and vehicles

Getting Started Internationally

• 1. Exporting
• 2. Outsourcing

Locally produced items are traded in overseas markets Work activities are done in overseas countries – use the advantage of cheap labour and cost effective operations One country uses certain resources such as technology, managerial skills, patents, etc. in another country (Franchising is a type of licensing) Investing in facilities in foreign

• countries. Include strategic alliances,

partnerships

Offshore vendors are outside of the company’s own country. Nearshore vendors are in countries that neighbor the contracting company’s

• wn country.

Onshore vendors are within a contracting company’s own country, although they may be located in a different city or state.

Currently there are more than 300 IT and BPO companies in Sri Lanka. These companies provide employment to more than 75,000 people bringing in revenue of more than US$600 million in exports.

Sri Lanka was awarded the prestigious “Offshoring Destination of the Year” award by the National Outsourcing Association (NOA), UK on 23rd of October 2013

Ref Page 108

Getting Started Internationally

• 3. Licensing

One country uses certain resources such as technology, managerial skills, patents, etc. in another country (Franchising is a type of licensing)

In 2017, SPAR International granted a licence to Ceylon Biscuits Limited (CBL Group) to operate the SPAR Brand as SPAR Sri Lanka in a joint venture with the SPAR Group Ltd South Africa. SPAR Sri Lanka has announced plans to open 20 SPAR Supermarkets within a five-year period; combining both convenience and neighbourhood stores to meet market needs.

Ref Page 108

Getting Started Internationally

• 4. Direct investing

Investing in facilities in foreign countries. Include strategic alliances, partnerships FDI’s in SL in 2017 was US$1.63bn More FDIs came from China, Hong Kong, Singapore and India Ref Page 108

Discuss 5 broad factors which directly impact on the growth of FDIs?

Factors Driving Globalization  i.e. Inter-depending

 Development of Technology (e.g. transportation)  Improved communication  Political realignments (e.g. EU)  Specialization (E.g. Saudi oil)  Efficiency and lower costs  Choices (e.g. Cosmopolitanism consumers)

Factors Driving Globalization