Global Systems & Global Governance
1. Key Terms
Globalisation - A process by which national economies, societies and
cultures have become increasingly integrated through the global network
of trade, communication, transportation and immigration. Globalisation
facilitates an increasingly interconnected world
Shrinking World (time/space compression) - The feeling of distant places
becoming increasingly closer and accessible due to IT and globalisation
Global Village - The breakdown of spatial barriers around the world
BRICS & MINT - Brazil
Russia
India
China
South Africa
Mexico
Indonesia
Nigeria
Turkey
Diaspora - A group of people living outside their ancestral homeland yet
maintaining emotional and material ties to home
Leakages - The savings, taxes and import spending that remove spending
from the circular flow of income
Labour - The physical and mental human effort used in the production
process
Capital - Money for investment
Foreign Direct Investment (FDI) - Investment made by a foreign company
in the economy of another country
GDP - Gross Domestic Product- the total market value of all final goods
and services produced annually in an economy
Repatriation of profits - Where a multinational returns the profits from an
overseas venture to the country where it is based
Remittances - Transfers of money/goods by foreign workers to their home
countries
Conglomerates - Major corporation that owns smaller companies in
unrelated industries
Trade Agreements - Treaties between countries to create a free trade area
where business can be conducted without tariffs or other barriers
Trading Bloc - Group of countries in a region that manage & promote
trade activities and lead to trade liberation (freeing of trade from
protectionist measures)
Bilateral Trade Agreements - Trade agreements between two countries
TTIP (Transatlantic Trade and Investment Partnership) - Trade agreement
between the EU & USA
OPEC (Organization of Petroleum Exporting Countries) - Trade agreement
of countries that export petroleum
,Bottom Up - When local people are consulted and supported in making
decisions to undertake projects or developments that meet one or more of
their specific needs
Top Down - Where decisions about development are made by
governments or private companies
NGO (non-governmental organization) - Any non-profit, voluntary citizens'
group which is organized on a local, national or international level
Global Systems - The environmental, political, legal, economic, financial or
cultural systems that help to make and remake the world we live in
Interdependence - A relationship between countries in which they rely on
one another for resources, goods, or services
Outsourcing - The act of getting goods and services from other cheaper
locations rather than locally
OECD (Organization for Economic Cooperation and Development) -
Intergovernmental organisation to stimulate economic progress and world
trade
Supply Chains - The sequence of processes involved in the production and
distribution of a commodity
Tariffs - Taxes on imported goods
Brain Drain - The loss of highly educated and skilled workers to other
countries
Containerisation - -A system of standardised transport that uses large
standard-size steel containers to transport goods
-The containers can be transferred between ships, trains and lorries,
enabling cheaper, efficient transport
Global Marketing - A marketing strategy that consciously addresses
customers, markets, and competition throughout the world
Single market - A single market allows for people, goods, services and
capital to move around a union as freely as they do within a single country
Trade - Exchange of goods and services
International Trade - The change of goods and services across national
borders
Visible Trade - Trade of goods, because they can be counted & given a
value
Invisible Trade - Trade of services e.g. tourism
Economies of scale - The cost advantages that result from the larger scale
of an operation as savings are made by spreading the costs or by
rationalising operations
Trade liberalisation - The move towards greater free trade through the
removal of protectionist barriers to trade
Protectionism - Governments impose restrictions on trade in goods and
services (usually to protect home-based industries from foreign
competition)
Comparative advantage - When a country produces/trades a good or
service they excel at producing e.g. wine in Italy
Imports - Goods/services purchased from abroad & brought into a country
Exports - Goods/services purchased by other countries & sent to them
Transition economy - An economy in the process of moving from a
centrally planned economy (state-run) to a mixed or free market economy
, Fair trade - Initiative set up to ensure producers e.g. farmers receive a fair
price for their product regardless of the price on the world market
Free trade - Policies of trade without tariffs and quotas
GNI (Gross National Income) - The value of the output of goods and
services produced in a country in a year
SDT (Special & Differential treatment) - Let least developed countries
bypass developed countries' tariffs which gives them greater market
access
UN (United Nations) - An institution dedicated to promoting dialogue
among countries with the goal of maintaining world peace
SEZ (Special Economic Zone) - Specific area within a country in which tax
and investment incentives are implemented to attract foreign (and
domestic) businesses and investment
SOE (State Owned Enterprise) - A large organisation created by a
country's government to carry out commercial activities
TNC (Transnational Corporation) - A company that operates in more than
one country
Horizontal Integration - A company diversifies its operations by expansion
to give a broader capability at production
Vertical Integration - The supply chain is fully owned by that company
which reduces costs
Country of Origin - Country where the company was founded
Host country - A country where a company that is based in another
country has business activities
Mergers - The combining of companies
Acquisitions - Larger company buys a smaller company
Subcontractors - A firm or person that carries out work for a company as
part of a larger project
Global Supply Chain - Networks that can span across multiple continents
and countries with a purpose of sourcing and supplying goods and
services
Global governance - The way global affairs are managed through norms,
laws, regulations & institutions
International laws - Established by countries through international
agreements (legally binding)
Norms - Accepted standards of behaviour
Sovereignty - A self-governing state or the 'supreme power or authority'
2. The History of Globalisation & Dimension and Flows of Globalisation
What was the fastest speed you could travel in the 1500s vs now? - -
10mph horse drawn carriages & boats
-700mph jet planes
What 'age' is the 200s? - The digital age
What did a Canadian academic create in 60s? - The concept of
globalisation through the term 'global village'
KOF index - Measures the economic, social and political dimensions of
globalisation
What are 3 positive consequences of globalisation? - -2012- Number of
Facebook users reached 1 billion (representing human connectivity)
1. Key Terms
Globalisation - A process by which national economies, societies and
cultures have become increasingly integrated through the global network
of trade, communication, transportation and immigration. Globalisation
facilitates an increasingly interconnected world
Shrinking World (time/space compression) - The feeling of distant places
becoming increasingly closer and accessible due to IT and globalisation
Global Village - The breakdown of spatial barriers around the world
BRICS & MINT - Brazil
Russia
India
China
South Africa
Mexico
Indonesia
Nigeria
Turkey
Diaspora - A group of people living outside their ancestral homeland yet
maintaining emotional and material ties to home
Leakages - The savings, taxes and import spending that remove spending
from the circular flow of income
Labour - The physical and mental human effort used in the production
process
Capital - Money for investment
Foreign Direct Investment (FDI) - Investment made by a foreign company
in the economy of another country
GDP - Gross Domestic Product- the total market value of all final goods
and services produced annually in an economy
Repatriation of profits - Where a multinational returns the profits from an
overseas venture to the country where it is based
Remittances - Transfers of money/goods by foreign workers to their home
countries
Conglomerates - Major corporation that owns smaller companies in
unrelated industries
Trade Agreements - Treaties between countries to create a free trade area
where business can be conducted without tariffs or other barriers
Trading Bloc - Group of countries in a region that manage & promote
trade activities and lead to trade liberation (freeing of trade from
protectionist measures)
Bilateral Trade Agreements - Trade agreements between two countries
TTIP (Transatlantic Trade and Investment Partnership) - Trade agreement
between the EU & USA
OPEC (Organization of Petroleum Exporting Countries) - Trade agreement
of countries that export petroleum
,Bottom Up - When local people are consulted and supported in making
decisions to undertake projects or developments that meet one or more of
their specific needs
Top Down - Where decisions about development are made by
governments or private companies
NGO (non-governmental organization) - Any non-profit, voluntary citizens'
group which is organized on a local, national or international level
Global Systems - The environmental, political, legal, economic, financial or
cultural systems that help to make and remake the world we live in
Interdependence - A relationship between countries in which they rely on
one another for resources, goods, or services
Outsourcing - The act of getting goods and services from other cheaper
locations rather than locally
OECD (Organization for Economic Cooperation and Development) -
Intergovernmental organisation to stimulate economic progress and world
trade
Supply Chains - The sequence of processes involved in the production and
distribution of a commodity
Tariffs - Taxes on imported goods
Brain Drain - The loss of highly educated and skilled workers to other
countries
Containerisation - -A system of standardised transport that uses large
standard-size steel containers to transport goods
-The containers can be transferred between ships, trains and lorries,
enabling cheaper, efficient transport
Global Marketing - A marketing strategy that consciously addresses
customers, markets, and competition throughout the world
Single market - A single market allows for people, goods, services and
capital to move around a union as freely as they do within a single country
Trade - Exchange of goods and services
International Trade - The change of goods and services across national
borders
Visible Trade - Trade of goods, because they can be counted & given a
value
Invisible Trade - Trade of services e.g. tourism
Economies of scale - The cost advantages that result from the larger scale
of an operation as savings are made by spreading the costs or by
rationalising operations
Trade liberalisation - The move towards greater free trade through the
removal of protectionist barriers to trade
Protectionism - Governments impose restrictions on trade in goods and
services (usually to protect home-based industries from foreign
competition)
Comparative advantage - When a country produces/trades a good or
service they excel at producing e.g. wine in Italy
Imports - Goods/services purchased from abroad & brought into a country
Exports - Goods/services purchased by other countries & sent to them
Transition economy - An economy in the process of moving from a
centrally planned economy (state-run) to a mixed or free market economy
, Fair trade - Initiative set up to ensure producers e.g. farmers receive a fair
price for their product regardless of the price on the world market
Free trade - Policies of trade without tariffs and quotas
GNI (Gross National Income) - The value of the output of goods and
services produced in a country in a year
SDT (Special & Differential treatment) - Let least developed countries
bypass developed countries' tariffs which gives them greater market
access
UN (United Nations) - An institution dedicated to promoting dialogue
among countries with the goal of maintaining world peace
SEZ (Special Economic Zone) - Specific area within a country in which tax
and investment incentives are implemented to attract foreign (and
domestic) businesses and investment
SOE (State Owned Enterprise) - A large organisation created by a
country's government to carry out commercial activities
TNC (Transnational Corporation) - A company that operates in more than
one country
Horizontal Integration - A company diversifies its operations by expansion
to give a broader capability at production
Vertical Integration - The supply chain is fully owned by that company
which reduces costs
Country of Origin - Country where the company was founded
Host country - A country where a company that is based in another
country has business activities
Mergers - The combining of companies
Acquisitions - Larger company buys a smaller company
Subcontractors - A firm or person that carries out work for a company as
part of a larger project
Global Supply Chain - Networks that can span across multiple continents
and countries with a purpose of sourcing and supplying goods and
services
Global governance - The way global affairs are managed through norms,
laws, regulations & institutions
International laws - Established by countries through international
agreements (legally binding)
Norms - Accepted standards of behaviour
Sovereignty - A self-governing state or the 'supreme power or authority'
2. The History of Globalisation & Dimension and Flows of Globalisation
What was the fastest speed you could travel in the 1500s vs now? - -
10mph horse drawn carriages & boats
-700mph jet planes
What 'age' is the 200s? - The digital age
What did a Canadian academic create in 60s? - The concept of
globalisation through the term 'global village'
KOF index - Measures the economic, social and political dimensions of
globalisation
What are 3 positive consequences of globalisation? - -2012- Number of
Facebook users reached 1 billion (representing human connectivity)
