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Negotiation Management

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GLOBAL SOURCING MANAGEMENT
AASM04-J
LONG QUESTIONS AND ANSWERS
STUDY UNIT 1
1. FACTORS INFLUENCING THE INTERNATIONALISATION OF BUSINESS
The last two decades have seen rapid changes in the global economy. National economies are becoming more integrated. A single, interdependent, global economic network has gradually developed and is still in the process of unfolding. Global megatrends which continue to influence the international business world include technological innovation; the shift in emphasis from manufacturing through services to the Information Age; the development of regional trading blocs; and changing demographic patterns.
The main driving forces for globalisation are:
 reduced trade and investment barriers that enable the free flow of goods, services and capital on a global scale
 unprecedented technological change and progress, especially with regard to communication, information and transportation technologies
 competition
 International trade blocs
 multinational corporations
Because of the globalisation of markets and production, over the last two decades, world trade has grown faster than world output. Foreign direct investment flows have increased substantially.
Imports have penetrated more deeply into the world’s industrialised economies and competitive pressures have increased continuously in one industry after the other. These factors have collectively added to the complexity of international management and of international purchasing management.
Declining barriers of trade and investment
Governments have given almost universal support to increasing trade. Over the years, they have signed many international agreements on trade, and have formed a range of organisations like the General Agreement on Tariffs and Trade (GATT), the Organisation for
Economic Cooperation and Development (OECD) and the World Trade

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