1、,International Business,Chapter I,Globalization,Learning Objectives,Describe the process of globalization and how it affects markets and production Indentify the two forces causing globalization to increase Summarize the evidence for each main argument in the globalization debate Identify the types
2、of companies that participate in international business Describe the global environment and identify its four main elements,Influence on markets and production and the forces behind its growth . . .,Illustrates the opportunities that globalization creates for entrepreneurs Localizes services for 19
3、nationals to capitalize on exploding global demand for user-created video content.,How globalization is reshaping our personal lives and altering the activities of international companies.,Globalization . . .,Globalization is reshaping our lives and leading us into uncharted territory New technologi
4、es drive down the cost of global communication and travel Reduce barriers to trade and investment Forces the industries to grow more competitive Competition intensifies on a global scale,International Business Involves Us All,The dynamic nature of international business affects each of us personally
5、 We experience the result of dozens of international transactions every day.,International business: any commercial transaction that cross the borders of two or more countries Imports: Goods and services purchased abroad and brought into a country Exports: Goods and services sold abroad and sent our
6、 a country Total value of goods and services exported by all nations each year is about $ 15 trillion.,Technology Makes It Possible,The most remarkable facilitator of societal and commercial changes today.,Idea for product hatched in Singapore Concept approved in USA (Houston) Concept design done in
7、 Singapore Engineering design in Taiwan Assembly in Singapore, Australia, China and India,Global Talent Makes It Happen,Media companies today commonly engage in a practice best describe as a global relay race.,Hulu employs two technical teams (China and USA) They work alternatively together,Globaliz
8、ation,Toward greater economic, cultural, political, and technological independence among national institutions and economics Characterized by denationalization Different from internationalization Increasingly freer flow of goods, services, money, people, and ideas across national borders,Globalizati
9、on of Markets,To convergence in buyer preferences in markets around the world,Important to international business because of the benefits it offers companies Reduce Marketing Costs Creates New Market Opportunities Levels Uneven Income Stream Yet local needs are Important,Globalization of Production,
10、The dispersal of production activities to locations that help a company achieve its cost-minimization or quality-maximization objectives for a goods or services. Benefits,Access Production Inputs,Access Lower-Cost Workers,Access Technical Expertise,Forces Driving Globalization,Falling barriers to tr
11、ade and investment Technological innovation,Greater competition is simultaneously driving companies world wide into more direct confrontation and cooperation.,Falling Barriers to Trade and Investment,General Agreement on Tariffs and Trade (GATT) was created in 1947 to promote free trade by reducing
12、both tariffs and nontariff barriers to international trade. World Trade Organization (WTO) has three main goals To help the free flow of trade To help negotiate the further opening of markets To settle trade disputes between its members Regional Trade Agreements between specific group of nations suc
13、h as EU, APEC Trade and National Output of the countries around the world has also been increasing,Technological Innovation,Technological innovation is accelerating the processing of encouraging globalization Information technology and transportation methods are making easier, faster and less costly
14、 to move data E-mail and videoconferencing Internet and World Wide Web Company Intranets and Extranets Advancements in Transportation Technologies Containerization,Measuring Globalization,Globalization Index comprises a compilation of over a dozens variables,Untangling the Globalization Debate,Globa
15、lization means different things to different people Businessperson: source of goods and services from lower-cost locations and new markets Economist: impact on jobs and standards of living Environmentalist: how effect on ecology Anthropologist: influence on the culture of a group of people Political
16、 scientist: power of governments Vs multinational companies Employee: opportunity for new work/ threat of current job,Todays Globalization Context,First age of globalization that extended from the mid-1800s to the 1920 300,000 people leaving Europe each year in the 1800s 1,000,000 people leaving eac
17、h year after 1900 The streamship, telegraph, railroad and later telephone and airplane Second age of globalization Communication satellites Fiber optics Microchips The Internet,Introduction to the Debate,Jobs and wages Labour and environmental regulation Income inequality National sovereignty Cultur
18、e,beneficial effects,harmful effects,OnGlobalization,Globalizations Impact on Jobs and Wages,Eliminates jobs in developed nations Lowers wages in developed nations Exploits workers in developing nations,Against Globalization,For Globalization,Increases wealth and efficiency in all nations Generates
19、labour market flexibility in developed nations Advances economies of developing nations,Globalization eliminates some jobs in a nation, it creates jobs in other sectors of the nations economy.,Globalizations Impact on Labour, the Environment, and Market,Labour standards: Trade union claim globalizat
20、ion reduces labours bargaining power and lowers global standards Environmental Protection: “race to the bottom” in environmental conditions and regulations Future markets: international firms exploit local labour markets and the environment,Lack of supporting evidence,Globalization and Income Inequa
21、lity,Inequality within Nations: developing nations can boost incomes of their poorest citizens by integrating themselves into the global economy Inequality between Nations: nations that embrace world trade and investment grow faster than rich nations, but nations that remain closed off from the worl
22、d economy have performed far worse. Global Inequality: it has fallen in recent decades but differ on the extent of the drop,Globalization and National Sovereignty,Menace to Democracy?,Globalization has helped spread democracy worldwide and aided progress on many global issues,Guardian to Democracy?,
23、Globalizations Influence on Cultures,Protesters complain that globalization is homogenizing our world and destroying its rich diversity of cultures.,Cultures of developing nations are thriving in an age of globalization and that deeper elements of culture are not easily abandoned,Supporters argue th
24、at globalization allows us all to profit from our different circumstances and skills. Trade allows countries to specialize in producing the goods and services they can produce most efficiently.,Key Players in International Business,Companies of all types and sizes and in all sorts of industries beco
25、me involved in international business. Small shop owner: import supplies from abroad Large company: have dozens of factories located around the world Small and medium sized company: a greater potion of international business largely because of advance in technology.,Key Players in International Busi
26、ness Multinational Corporations,Multinational corporation (MNC) is a business that has direct investments abroad in multiple countries. MNCs generate significant jobs, investment, and tax revenue for the regions and nations they enter. Large MNCs still conduct most international business transaction
27、s. MNCs great economic and political muscle and their deals are often worth billion of dollars.,Key Players in International Business Entrepreneurs and Small Business,Entrepreneurs and small firms are increasingly active in international business because the Internet and other technologies help them
28、 overcome high advertising and distribution costs Globalization has given rise to the born global firm a company that adopts a global perspective and engages in international business from or near its inception.,Why International Business is Special The Global Business Environment,Globalization is t
29、ransforming business and society and increasing competition for all firms Many national business environments comprise unique cultural, political, legal and economic characteristics that define business activity within a nation The international business environment influences how firms conduct operations, while globalization further interlinks the flows of trade, investment and capital International firm management differs from management of a purely domestic firm in nearly all respects,The Global Business Environment,Questions & Answers,Thanks for your kind attention,
