1、ENVORNMENT,Objectives,Cultural and social factors Political and legal factors Major economic communities,Cultural and social factor,Culture is a system of learned, shared, unifying, and interrelated beliefs, values, and assumptions. Successful international trade is dependent upon learning about and
2、 appreciating other cultures.,Important points,Cultures and subcultures have a major influence on international business transactions. We all have our cultural baggage which affects international trade. Family units, education, gender roles, family, mobility, and class system are components of socia
3、l organization which differ from culture to culture.,Important points,Language represents the highest form of a groups culture. Learning another language could definitely have a positive impact on closing an international business deal. Ethnocentrism, culture shock, and reverse culture shock are maj
4、or reactions to cultural differences.,Cultural and social factors,Culture accepted behaviors, values, and customs of a society. Has a strong influence on business activities Main cultural and social factorslanguage, education, religion, values, customs, social relationships Relationshipsinclude inte
5、ractions among families, labor unions, and other organizations,Coke gets it right?,Coke then researched 40,000 Chinese characters and found a close phonetic equivalent “ke-kou-ke-le”（可口可乐）, which can be loosely translated as “happiness in the mouth”.,Coke gets it wrong,The name Coca-Cola in China wa
6、s first rendered as Kou-ke-kou-la（口渴口蜡， “食之无味” ）. Unfortunately, the Coke company did not discover until after thousands of signs had been printed that the phrase means “thirsty” or “hot”.,Pepsi and KFC,In Taiwan, the translation of the Pepsi slogan “Come alive with the Pepsi Generation” came out as
7、 “Pepsi will bring your ancestors back from the dead.” Also in Chinese, the Kentucky Fried Chicken slogan “finger-lickin good” came out as “eat your fingers off.”,Cultural factors,Material culture: living style, promotion media (foreign piano to China,) Language Aesthetics (design, color, music, bra
8、nd name) Education (level of education, E and consumption) Religion Organizations,The Role of Cultural Forces,Language: verbal, physical, translation Local customs: false step true step http:/ Education History: bearing the burdens of the past Religion Family,Language,Verbalphysicalgestures, carriag
9、e, proximity, eye contact, smilingtranslation:,Religion,Religious segmentation Holiday markets Numerology Dates (择日）,Family,Matriarchal /patriarchal societies The extended family Family-owned businesses Whose family values,Political and legal factors,Government regulation Government restrictions Typ
10、e of government, stability of government, and government policies toward business,Why is politics important?,Politics can prohibit trade US sanctions and embargoes on Iraq, North Korea, Cuba Politics can restrain trade US controls on advanced computers to China Australian restrictions on NZ apples (
11、SPS) US and EU restrictions on agricultural imports to protect local industry NZ restrictions on Korean whiteware to protect local industry,Embargoes $,Tariffs $,Legal Analysis,Trade Quotas $,Local Content Laws $,Political Analysis,Types of Trade Restrictions,Protection of US steel industry,Bush adm
12、inistration has imposed tariffs on imports to protect US producers Anger around world steel producers Japan European Union Korea Brazil, Taiwan, Russia, Germany, Turkey, France, China, Australia the Netherlands and NZ,Tariffs,1947 average tariffs were 40% after UR industrialised countries 5% 3.5% EU
13、 6.8% 4.1% US 6.6% 3.4% Some industries in some countries tariffs abolished EU 40% of all imports are duty free,Non-tariff barriers (NTB),Disguised barrier to trade Countries seldom admit to NTB - happens elsewhere Often have good reason eg to protect domestic crops from fire blight As tariffs have
14、fallen NTB have become more prevalent,Varieties of NTB,quotas and voluntary export restraints US impose on Japan Discriminatory government procurement policies Customs procedures validation, documentation, etc Sanitary and Phytosanitary measures health of animals, plants,Restraintliberalisation & fa
15、cilitation,Governments can restrict trade military, local interest groups, economic (eg trade balance) Governments can also liberalise trade remove restrictions Governments can facilitate trade incentives/support for exporters foreign investors importers (eg Japan),4 Policy tracks,open and outward-l
16、ooking domestic economic policies bilateral relations with individual trading partners E.g. CER with Australia interaction with regional economic groupings APEC, NAFTA, EU, AFTA, MERCOSUR Multilateral system,Major economic communities,WTO EU & NAFTA APEC,World Trade Organisation,established 1 Januar
17、y 1995 126 members Entry of China (and Taiwan) major issues in 2001 Aims to continue liberalisation of world trade,WTOs 3 aims,to help trade flow as freely as possible produce transparent and predictable rules via trade negotiations dispute settlement eg Australia/NZ access to US market 167 cases 19
18、95-99 Latest steel protectionism in US a major test,European Union & NAFTA,The European Union facilitates trade among member countries by establishing common currency, product standards, and the free flow of people and capital. NAFTA (North American Free Trade Association) has created an economic co
19、mmunity to link the U.S., Canada, and Mexico.,APEC,Asia Pacific Economic Co-operation 1989 Australian initiative; took off with Clintons hosting of Blake Island summit 1993 Original members North America, Australasia, some East and Southeast Asia,Importance of APEC,Combined GDP of US$17,921 billion
20、46.8% of world trade,Meetings,Leaders Meetings (politicians) Senior Officials Meetings APEC Business Advisory Council (ABAC) other committees, working groups, etc,APEC objectives,Free and open trade and investment in Asia Pacific2010 for developed countries2020 for developing countries Non-discrimin
21、atory complements other liberalisation mechanisms GATT/WTO,Does APEC have a future?,Liberalisation process slowing down opposition from Japan, etc Effect of Asian financial crisis More emphasis on capacity building measures ie improving capacity to trade rather than removing barriers to trade,Harry
22、is a marketer of a large MNC, he was sent to Europe on a business trip by his company to promote the products. Harrys first stop was London, where he made short business talk with some bankers in London just by telephone, then he went to Paris, he had dinner with Yake, who is the president of an eng
23、ineering company. At the dinner, he told Yake: “Please call me Harry” and called his customers first name. When he arrives in Germany. He made a long artistic speech, and showed his products by some photos and viedio material. Then he went to Italy by air, on the trip, he met a Japanese man, he put the name card on the tray and when they say goodbye to each other, he held the mans right arm, shake hands with the Japanese and said good bye. Lastly, he wore casual sportswear to meet an Italian designer, because he knew that the Italian people are famous for their easy life.,
