SQA Advanced Higher Business Management

**Globalisation** is the growing connection of national economies through trade in goods and services, the movement of capital and people, and the spread of technology, information and culture. For a business it means that suppliers, customers, competitors and sources of finance are no longer confined to the home country, and that events in one market (a change in a tariff, a currency fall, a factory fire) reach firms thousands of miles away within days. A **multinational corporation** (MNC) is a business that owns or controls operations in more than one country, usually with its head office in one country (the home country) and production, sales or service sites in others (host countries). Unilever, Toyota, Apple, Shell and Diageo are all multinationals, and so are far smaller businesses that run a single overseas branch. ## What drives globalisation Several changes over the past seventy years have made trading and operating abroad cheaper and less risky. - **Trade liberalisation.** Successive rounds of negotiation under the General Agreement on Tariffs and Trade (1947) and then the World Trade Organization (WTO, created in 1995) cut tariffs and reduced quotas. Regional blocs such as the EU and ASEAN went further and removed most barriers between their members. - **Transport.** Containerised shipping, larger vessels and cheaper air freight lowered the cost of moving goods, so a product can be made in one continent and sold in another at a competitive price. - **Information…