TABLE OF CONTENT
1. QUESTION 1 2
1.1. Various types of globalisation 2
1.2. World Bank: Worldwide Governance Indicators 2
1.3. Justice theories as
... [Show More] theory of business ethics 3
2. QUESTION 2 5
2.1. Examples of technology and innovation influencing the business world 5
2.2. Aside from innovation, describe 5 other drivers of competitiveness 6
2.3. Need for a global information system 6
3. QUESTION 3 8
3.1. Explain what transfer pricing entails 8
3.2. The types of foreign exchange exposure MNC can encounter in foreign exchange market 8
3.3. Contrast forward exchange contract with foreign currency options with examples 9
3.4. Role of capital market in the economy 10
4. BIBLIOGRAPHY 11
1. QUESTION 1
1.1. Various types of globalizations
Two major types of globalization are described by Aregbeshola (2017, 7), namely market and production globalisation.
In essence, marketplace globalizations involves merging of previously discrete and independent markets into a global structure. Market globalization thus enables international trade via removal of trade barriers. Differing consumer tastes from various parts of the world set new global standards, which enable them to receive the same products from different companies. Globalization of markets also leads to stiffer competition as businesses compete for customers from different parts of the world. (2)
Manufacture globalization enable companies to source goods from various parts of the globe in order to take advantage of differences in quality, cost and the performance of things like raw materials, land, capital and labor. Companies become more competitive as they develop their respective international production networks.
1.2. World Bank: Worldwide Governance Indicators
The worldwide governance indicators (WGI) encompass measures of efficiency and effectiveness of political leadership. The indices are reported for 215 various economies and cover six (6) criteria. The different criteria described by Aregbeshola (2017, 25-26) include:
• Voice and accountability: the criteria measures the degree citizens enjoy freedom of expression to matters of public concern, without fear of persecution from ruling authorities. Voice and accountability captures perceptions of the extent to which a country's citizens are able to participate in selecting their
government, as well as freedom of expression, freedom of association, and a free media.(4)
• Political stability and the absence of violence: Political stability and absence of violence / terrorism measures perceptions of the likelihood of political instability or politically motivated violence. This criterion serves as yardstick for a country’s political maturity in relation to peaceful transfer of power from one government to another and the prevalence of terrorist inflicted violence.(5)
• Government effectiveness: the criteria captures perceptions of the quality of public services, the quality of the civil service and the degree of its independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies.(6)
• Regulatory quality: captures perceptions of the ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development.(7)
• Rule of law: the criteria captures perceptions of the extent to which agents have confidence in and abide by the rules of society, and in particular the quality of contract enforcement, property rights, the police, and the courts, as well as the likelihood of crime and violence.(8)
• Control of corruption: captures perceptions of the extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests.(9)
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