Ethical and environmental considerations - OCRThe concept of globalisation

In business, globalisation refers to companies operating internationally or on a global scale. This involves most of the world’s economies working together to enable businesses to produce and trade goods and services. The three main elements of globalisation are imports, exports and business location.

Globalisation involves businesses buying, selling and producing around the world. For example buying materials wherever they are available at the lowest cost, and producing where labour is most productive.

Additionally, some products have a reputation for being from a certain part of the world, so producers of these products based in that location may be able to sell them around the world. For example, pizza and pasta originally came from Italy, so people in other countries may be willing to pay more for Italian brands of these products.

The process of buying from and selling to overseas countries is also known as international trade.