TCWD111 – Lessons 1-3

MRS. SHENNA JOY S. BOBILA

avoids PAROCHIALISM
inherently INTERDISCIPLINARY
connectivity; social
relations/exchanges
an UNEVEN process
Globalization is about the liberalization
and global integration of market.
Globalization is inevitable and
irreversible.
Nobody is in charge of globalization.
Globalization benefits everyone.
Globalization furthers the spread of
democracy in the world.
 Global Economy
➢ refers to the international exchange of goods and services; free
movement of goods, capital, services, technology and information

PROTECTIONISM
✓ comes in the form of tariffs and quota
✓ giving preferential treatment to domestic producers
TRADE LIBERALIZATION
✓ free trade
 THE ROLE OF
INTERNATIONAL
FINANCIAL INSTITUTIONS
IN THE CREATION OF
GLOBAL ECONOMY
IFI’s or International Financial Institution
Purpose
--- play a significant role in supporting the private sector in
developing countries by encouraging entrepreneurial initiatives
that help developing countries achieve sustainable growth;

Role/Mission
--- - created in the aftermath of WWII to promote international
monetary stability countries achieve sustainable growth;
 International Financial
Institutions
1. IMF or International Monetary Fund
2. Multicultural Development Bank (MDBs) which
includes:
a. World Bank Group
b. African Development Bank
c. Asian Development Bank
d. Inter-American Development Bank
e. European Bank for Reconstruction and Development
 THE CONTEMPORARY
GLOBAL CORPORATION
International Companies
--- are importers and exporters; they have no investment outside
of their home country

Multinational Companies
--- has locations or facilities in multiple countries, but each
location functions in its own way, essentially as its own entity
Global Companies
--- also has locations in multiple countries, but they’ve
figured out to create one company culture with one set of
processes that facilitate a more efficient and effective single
global organization

Transnational Companies
--- a commercial enterprise that operates substantial facilities;
does business in more than one country and does not consider
any particular country its natural home
 ECONOMIC GLOBALIZATION
ADVANTAGES DISADVANTAGES
•Develop or create job •Low wages, poor
opportunities for locals by working conditions,
implementing economic works exaggerated job
from Multinational Businesses qualifications, and
into National and Local
unreasonable working
Businesses that helps to
hours for developing
increase economic growth.
countries, like
•Sustain or supply cheaper Philippines.
products that makes them
affordable to the locals, and •Lost support of Local
requires lower capital to goods which causes local
establish a business. business bankruptcy.
Example: BPO/Foreign owned companies
DISADVANTAGES
ADVANTAGES ✓ exaggerated job
• stimulates job qualifications
opportunities for locals ✓ working unreasonable
hours and conditions
✓ low wages

Example: Online Shops/Marketplace

ADVANTAGES DISADVANTAGES
• affordable and ✓ local brands or local
convenient businesses losses its
local supports
 MARKET INTEGRATION
--- a situation in which separate markets for the
same product become one single market
(Cambridge Business English Dictionary )

Example :
*when an import tax in one of the market is removed
 MARKET INTEGRATION
--- occurs when prices among different locations or
related goods follow similar patterns over a long
period of time;

--- group of goods often move proportionally to

each other and when this relation is very clear
among different markets it is said that the markets
are integrated
 TYPES OF
MARKET INTEGRATION
 Horizontal Integration
❖ is a type of integration, by combining the
market agencies to form a union to reduce
their effective member and the extent of
actual competition in market
 ❖ Partnership: collaborating with
another company to tackle the market
together (with a common product,
promotion, sales strategy, etc.)
 ❖ Merger: when two different
companies in the same market become
one; a combination of entities whose
products or services directly compete in
the same market

22
❖Acquisition: when a
company buys another
within the same market

24
Conglomerate Integration/Merger
❖a combination of agencies or
activities not directly related to
each other may operate under a
unified management
28
 Vertical
Integration
It occurs when a firm
performs more than one
activity in the sequence of
the marketing process.
➢ Forward integration
•if a firm assumes another function of
marketing which is closer to the consumption
function
➢ Backward integration
•this involves ownership or a combination
of sources of supply
 FORMS OF
MARKET INTEGRATION
PREFERENTIAL TRADING
AGREEMENT

➢ trade agreements between countries

in which they lower tariffs for who
have signed the agreement, but not
for the rest of the world
CHINA-BANGLADESH

BANGLADESH-BHUTAN
FREE TRADE
AGREEMENT
➢ reduces barriers to trade among
member countries to zero, but each
member country still has autonomy in
deciding for external rate of tariff for
its trade with non-member countries
❖ North American Free Trade Agreement (NAFTA)
--- was implemented in order to promote trade between the U.S.,
Canada, and Mexico

❖ The ASEAN Free Trade Area (AFTA)

--- is a trade bloc agreement by the Association of Southeast Asian
Nations supporting local manufacturing in all ASEAN countries
CUSTOMS UNION

➢ an agreement to remove trade barriers

among members and impose uniform
trade restrictions against non-members

42
➢ an economic Customs Union founded in 1948
between Belgium, Netherlands and Luxembourg
COMMON MARKETS

➢ allows for the movement of labor

and capital within the member
countries

➢ Custom Unions + integration of

factor markets (capital and labor)
Example:
❖ EUROPEAN COMMON MARKET is the example
of common market which aims to provide the free
movement of goods, capital, services and labor within
the EUROPEAN UNION

➢ it refers to an agreement between countries that allows

product, services and workers to move freely across
borders
❖The Southern Common Market (MERCOSUR)
--- el Mercado Común del Sur (the Common Market of the South)
is a regional integration process, initially established by Argentina,
Brazil, Paraguay and Uruguay, and subsequently joined by
Venezuela and Bolivia

❖The Common Market for Eastern and Southern

Africa (COMESA)
--- is a free trade area that encompasses 19 countries stretching
from Libya to Zimbabwe
ECONOMIC UNION
➢ an agreement that seeks to coordinate economic and social
policies to facilitate the free flow of capital, labour, and goods
and services from country to country;
➢ a form of regional cooperation agreement, when fully
implemented, entails creation of a unified central bank; the
use of a single currency; and common policies on agriculture,
social services and welfare
 FEATURES OF AN ECONOMIC UNION
➢ Goods, services, and production factors (capital and labour) flow
freely among member countries;
➢ All members adopt a uniform set of policies when trading with non-
members;
➢ Members establish the general institutions and economic policies for
trade unions;
➢ Economic unions integrate monetary and fiscal policy. Member
countries coordinate and harmonize government policy, taxation, and
spending.
 EUROPEAN UNION
➢ the world’s largest trading bloc;
➢ one of the largest exporters in the world;
➢ it imports goods and services from more than 100 countries, making
them the world’s largest import market
 EURASIAN ECONOMIC UNION
➢ a political and economic union of countries in central and northern
Eurasia;
➢ the agreement on establishing a union signed in 2014 by Russia,
Belarus, and Kazakhstan;
 REFERENCES
 https://www.tfafacility.org/united-nations-conference-trade-and-development-unctad
 https://www.routledge.com/United-Nations-Centre-on-Transnational-Corporations-Corporate-Conduct-
and/Hamdani-
Ruffing/p/book/9781138896536#:~:text=The%20United%20Nations%20Centre%20on,multiplied%20and%20deepe
ned%20with%20globalization.
 https://atom.archives.unesco.org/go-59
 https://www.encyclopedia.com/social-sciences/encyclopedias-almanacs-transcripts-and-maps/transnational-
corporations#:~:text=A%20transnational%20corporation%20(TNC)%20is,xii
 https://courses.lumenlearning.com/boundless-management/chapter/the-global-
corporation/#:~:text=of%20each%20unit.-
,Global%20Corporations,markets%20in%20attaining%20revenue%20generation.
 https://www.unescwa.org/association-southeast-asian-nations-free-trade-are
 https://www.studocu.com/ph/document/polytechnic-university-of-the-philippines/the-contemporary-world
 https://slideplayer.com/slide/5930801/
 https://abhipedia.abhimanu.com/Article/IAS/NDI5MAEEQQVVEEQQVV/Stages-of-Economic-Integration-and-
trends-in-globalization--Economic-Affairs-IAS
 https://www.consuunt.com/horizontal-integration/