Globalisation

Matthew Martin

Content

There are three planks supporting of globalisation.

The World Trade Organisation (WTO): The WTO settles trade disputes. Such disputes often centre around unfair trade tariffs imposed on the import of goods of a certain type. e.g. recently the USA imposed import duties on steel in order to protect its own steel industry, the EU has appealed to the WTO.
The World Bank (also the International Monetary Fund should be mentioned here): The World Bank provides loans. As a condition of these loans, economic restructuring is often required. In the past few years the World Bank has been accused of making serious errors, such as with the economies of Argentina and Indonesia.
The Multilateral Agreement on Investment (MAI): This is a multifaceted agreement designed to make it easier for investors to make investments and transfer funds internationally. It lays a common framework by which investors can provide capital.

Markets are becoming increasingly global and consequently increasingly competitive in almost every business sector.
The globalisation of markets is making the end consumer global. Products are now for a global market and must be designed, produced and marketed as such.
Advances in IT are lowering margins. The hope is that IT will improve productivity. This seems to be happening in the USA and Japan but Europe has yet to show any definite gains.
Mergers and acquisitions are leading to the consolidation of industry. There a re fewer and larger organisations.
Developments in IT are encouraging change in business thinking. Business process re-engineering is leading to the alteration of business processes and SOPs.
There is an increased belief that investment in IT infrastructure can lead to insights in the way the organisation functions and that this can lead to major increases in productivity.
Related to the above point, there is more and more a tendency to get rid of legacy systems and replace them with integrated, enterprise-wide systems.
Advances in IT systems are meaning that the rate at which old products can be redesigned and put into the market place has greatly increased. The product cycle-time is greatly reduced.

Matthew Martin