MODULE 5: GLOBALISATION
5.1.1 EXPLAIN GLOBALISATION
Globalization involves the movement and exchange of people, goods,
services, ideas, technology and culture across borders.
5.1.2 EXPLAIN FACTORS INFLUENCING GLOBALISATION
1. Technological advancements
Improvements in communication technology (e.g. internet, mobile phones,
satellite communication) make it easier for people and businesses to connect
globally.
Advances in transportation (e.g. faster ships, airplanes, containerization)
reduce the cost and time of moving goods and people across borders.
2. Economic factors
Trade liberalization: Reduction of tariffs, quotas, and other trade barriers
encourages international trade.
Growth of multinational corporations (MNCs): These companies operate in
multiple countries, promoting global production and consumption patterns.
Foreign direct investment (FDI): Countries and firms invest in other
countries, linking economies together.
3. Political and legal factors
Formation of international and regional organizations (e.g. WTO, EU,
ASEAN) that promote free trade and economic cooperation.
Deregulation and privatization policies in many countries encourage foreign
participation in domestic markets.
4. Social and cultural factors
Increased migration and tourism spread ideas, cultures, and values.
The global spread of media, fashion, food, and entertainment leads to cultural
blending and awareness.
5. Environmental and resource factors
Global concerns over climate change and sustainable development foster
international cooperation.
The global demand for natural resources (e.g. oil, minerals, agricultural
products) creates interdependence among nations.
6. Competitive and market factors
Companies seek new markets, lower costs, and efficiency by producing or
selling in other countries.
Consumer demand for diverse products and services encourages
international trade.
5.1.3. DISCUSS THE IMPACT OF GLOBALIZATION
ADVANTAGES
Increased trade and investment: Countries can export goods, attract foreign
direct investment (FDI), and access global markets
Technology transfer: Developing countries benefit from advanced
technology and innovation.
Cultural exchange: Globalization promotes understanding and appreciation
of other cultures.
Job creation: New industries and markets open up, creating employment
opportunities.
Access to a wider variety of goods and services: Consumers enjoy more
choices at competitive prices.
DISADVANTAGES
Loss of local industries: Small or traditional businesses may struggle to
compete with international corporations.
Job losses in certain sectors: Some industries may decline due to
competition from imports.
Cultural erosion: Local traditions and languages can be overshadowed by
dominant global cultures.
Environmental degradation: Increased industrial activity can lead to
pollution and exploitation of natural resources.
Economic inequality: The benefits of globalization may be unevenly
distributed, increasing the gap between rich and poor.
5.1.4 OUTLINE BOTSWANA’S TRADE AGREEMENT (WHO, SACU, SADC)
1. World Trade Organization (WTO)
It commits to fair trading rules, reducing tariffs, and resolving trade disputes
through the WTO system.
2. Southern African Customs Union (SACU)
Members: Botswana, South Africa, Namibia, Lesotho, Eswatini.
Features: Free movement of goods within the union, a common external tariff
for goods entering the region, and revenue sharing from customs duties.
3. Southern African Development Community (SADC)
SADC promotes regional integration through:
The SADC Free Trade Area (FTA), allowing reduced or zero tariffs on goods
traded between member states.
Harmonization of standards, policies, and infrastructure development.
5.1.5 DISCUSS FREE TRADE AGREEMENT
A free trade agreement (FTA) is a pact between two or more countries to reduce or
eliminate barriers to trade (such as tariffs, import quotas, and preferences) on goods
and services traded among them.
Advantages of FTAs:
Encourages trade by making imported goods cheaper.
Boosts economic growth through expanded markets.
Provides consumers with more choices at lower prices.
Enhances cooperation and strengthens political ties between member
countries.
Disadvantages of FTAs:
Domestic industries may face increased competition from imports.
Smaller or less developed countries might benefit less than stronger
economies.
Can lead to job losses in industries that cannot compete.
Over-reliance on trade partners can expose economies to external shocks.
5.1.6 DESCRIBE THE INTERNATIONAL BUSINESS ENVIRONMENT
1. Economic environment
Currency exchange rate
Purchasing power
Competition
These factors determine how affordable products are and how businesses compete
internationally.
2. Physical environment
Distance
Infrastructure
Climate conditions
Population distribution
This refers to geographical and environmental features that can affect distribution
and operations.
3. Social & cultural practices
Language
Education level
Aesthetic values
Religious beliefs
Attitudes and values
These are the customs, traditions, and social norms that influence consumer
behavior and business etiquette.
4. Legal environment
Trade agreements
Trade laws
Employment laws
Competition laws
Intellectual property rights
Quality standards
Packaging and labeling requirements
These rules regulate how business is done and protect rights of businesses and
consumers.
4. Technology
E-commerce
E-marketing
Communication
Information availability
Innovation
These technological factors impact how businesses market, sell, and communicate.
5. Political environment
Forms of government
Type of leadership
Extent of leadership changes
Government stability
This relates to the political conditions that may affect the ease of doing business,
such as stability and policy changes.
5.1.7 CONDUCT SIMPLE ENVIRONMENTAL SCAN OF A FOREIGN
MARKET USING ICT
Environmental Scan of the Kenyan Market Using ICT
1. Political Environment
Kenya is a stable democracy in East Africa.
The government promotes ICT growth through policies like Kenya Vision
2030 and the Digital Economy Blueprint.
There are opportunities in e-government services and public-private
partnerships in technology.
2. Economic Environment
Kenya is the largest economy in East Africa.
Rapid growth in ICT sector, contributing over 8% to GDP.
The country is a regional hub for mobile banking (e.g. M-Pesa).
Key sectors: agriculture, services, manufacturing, ICT.
3. Socio-Cultural Environment
Youthful population: over 70% under age 35.
High mobile phone penetration (over 90%).
Growing digital literacy and appetite for digital solutions (e.g. e-commerce,
online learning).
4. Technological Environment
Strong ICT infrastructure: extensive mobile networks, undersea fibre optic
cables.
Widespread use of mobile money platforms.
Government and private investment in innovation hubs (e.g. iHub, Konza
Technopolis).
5. Legal Environment
Laws support ICT development: Data Protection Act, Computer Misuse and
Cybercrimes Act.
Regulatory bodies: Communications Authority of Kenya (CAK).
Clear rules on e-transactions and data privacy.
6. Environmental Factors
Focus on green ICT (e.g. solar-powered base stations).
Climate change policies affect industries like agriculture — opportunities for
Agri-tech solutions.
5.1.8 PRESENT A REPORT OF THE ENVIRONMENTAL SCAN
Report of the Environmental Scan
Title:
Environmental Scan of the Kenyan Market Using ICT
Introduction:
This report presents an environmental scan of the Kenyan market with emphasis on
the role of ICT in shaping opportunities and challenges for businesses seeking to
enter or expand in Kenya.
Findings:
Political: Supportive policies and stability encourage ICT investment.
Economic: Fast-growing economy, ICT contributes significantly to GDP.
Socio-cultural: Young, tech-savvy population with high mobile penetration.
Technological: Advanced infrastructure, leading mobile money innovation.
Legal: Data protection and cyber laws in place, regulated ICT space.
Environmental: Opportunities in green technology and agri-tech.
Conclusion:
Kenya offers a dynamic and promising environment for ICT-driven businesses, with
strong government support, an enabling legal framework, and a ready market.
However, businesses must comply with local regulations and adapt to socio-cultural
expectations.