Question

1. Explain the term ‘Globalisation’. Why do companies engage in international business?

Answer 1

The term 'Globalization' means integration of the economies of the different countries allowing free trading and flow of capital across the borders.

Companies engage in international business with the intension to fulfil the following objectives:

• Enhance the flow of their goods and services across the nations.
• Exchange of technology and expertise among the nations.
• Maximize the reach of their products resulting to rise in their profits and brand value across the globe.
• To get the benefit of cheap labor and low cost of doing business in underdeveloped countries intended to enhance the living standard and give a boost to their economy.
• Minimize competition risk by entering into new markets.
• To have greater access to diversified talent of different economies.