Trade Globalisation & Strategic Management.

Essay by casper006University, Bachelor'sA+, October 2005

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Globalisation is seen as making the world become one community. There is a tendency for world investment and business to move from national and domestic markets to a worldwide environment. However, Trade Globalisation is only a part of Globalisation. But trade globalisation eliminates all boundaries, causing firms to engage in business worldwide. Consequently global managers will have to deal with a number of challenges. They will need management strategies to help them make the correct choices and decisions. This paper will look at trade globalisation, strategic management and the interaction between them. It will also show how important these challenges are and identify appropriate ways to help managers to deal with these challenges.


2.1 What is Globalisation?

Globalisation in its literal sense is a social change, an increased connectivity among societies and their elements due to the merging of cultures; the explosive evolution of transport and communication technologies to facilitate international cultural and economic exchange.

The term is applied in various social, cultural, commercial and economic contexts. "Globalisation" can mean (America, online, 03/2005, 10:20 am):

-The formation of a global village - closer contact between different parts of the world, with increasing possibilities of personal exchange, mutual understanding and friendship between "world citizens".

-Economic globalisation - more freedom of trade and increasing relations among members of an industry in different parts of the world (globalisation of an industry), with a corresponding erosion of National Sovereignty in the economic sphere.

-The negative effects of profit-seeking multinational corporations - the use of substantial and sophisticated legal and financial means to circumvent the boundaries of local laws and standards, in order to leverage the labour and services of unequally-developed regions against each other.

Globalisation shares a number of characteristics with internationalization and is used interchangeably, although some prefer to...