MNG 00723 Assessment 1: Short written response (20 marks) 1500 words Due: Monday 9 am Week 5 Answer the following 3 questions (each approximately 500 words): 1. What is globalisation and how does it...

MNG 00723 ASSESSMENT 1
SHORT WRITTEN RESPONSES
Table of Contents
Question 1    3
Defining the Concept of Globalisation    3
Positive Impacts of Globalisation    3
Negative Impacts of Globalisation    3
Question 2    4
Factor Proportion Theory    4
Product Life Cycle Theory    4
Limitation of Product Life Cycle    4
Question 3    5
Introduction to the Scenario    5
Reasons behind imposition of tariff on Chinese imports    5
Impact of the tariff imposition on customers    5
Inferring from the Scenario    6
References    7
Question 1
Defining the Concept of Globalisation
Globalisation is the process of interaction and integration of people beyond the boundaries of a particular state. According to Krugman (2017), it leads to an increase in the size of the market thereby providing enormous opportunities for a business to scale up its operations. The trading partners across the globe interact with each other for mutual beneficial relationship.
Positive Impacts of Globalisation
Transfer or exchange of technology: Every state has some core competencies and something unique, at which it is the bets. Globalisation helps in transfer or exchange of superior technology to countries that are low level of technology. Technology helps in improving the efficiency of operation thereby increasing the quantum of products, reducing the average cost of production and achieving economies of scale.
Improvement in quality of products through competition across the globe: In the earlier times, the customers had to rely on local producers for the products even if there was a problem with the quality of the product. However, globalisation has led to an increase in the competition in the market, thereby leading to an increase in the quality of the offering by each players to gain maximum market share. This has ultimately benefited the customers as the customers have the bargaining power due to presence of large multinational and local players.
Opportunities for growth: As noted by Potrafke (2015), with the advent of globalisation, companies are no longer confined to the local boundaries of a state for their market. They can reach the market across the globe and offer their products to the target customer. This has led to an increase in the size of the market for the company, which helps the in increasing the volume as well as profitability of their business.
Negative Impacts of Globalisation
Dominance of multinational companies: Companies operating across the globe achieve economies of scale thereby reducing the market price of goods and service. On the other hand, the local players are unable to compete with the multinational due to lower production volume and other issues. This leads to advantage for the multinational over local players, which curbs the entrepreneurial spirit among the local public.
Unemployment in countries that have a higher labour cost: As noted by Bende-Nabende (2017), multinationals tend to procure labour form countries that have low labour cost. This leads to an increase in unemployment in developed countries where the labour is costly. Outsourcing of employees from other countries leads to creation of a situation of unemployment in the home country.
Expansion of digitalisation that favours the developed countries: With the advent of globalisation, digitisation has been into the limelight. Developed countries are able to invest heavily in research and adapt to the...