Transcript Globalization

Globalization
Copyright © 2010 Pearson Education,
Inc. publishing as Prentice Hall
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• Describe the process of globalization
• Explain how globalization affects markets
and production
• Identify two drivers of globalization
• Summarize the globalization debate
• List types of firms in international business
• Describe the global business environment
Copyright © 2010 Pearson Education,
Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 2
Globalization Involves Us All
We experience international
transactions daily
Imports and exports reach
even remote areas
Technology and e-biz
promote trade
Consumers and companies
pull markets closer
Copyright © 2010 Pearson Education,
Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 3
International Business
Copyright © 2010 Pearson Education,
Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 4
Globalization
Trend toward greater economic, cultural, political
and technological interdependence among national
institutions and economies
Globalization of
markets
Globalization of
production
Convergence in buyer
preferences in markets
around the world
Dispersal of production
activities worldwide to
minimize costs or
maximize quality
Copyright © 2010 Pearson Education,
Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 5
Benefits of Globalization
Globalization
of markets
Globalization
of production
• Reduces marketing costs
• Access lower-cost labor
• New market opportunities
• Access technical expertise
• Levels income stream
• Access production inputs
Copyright © 2010 Pearson Education,
Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 6
Challenges to Business
Physical
security
Digital
security
Reputational
risk
Examine company
vulnerability and
create a disaster
recovery plan
Guard proprietary
information and
confidential
communications
Require ethical and
lawful behavior from
all employees and
business partners
Copyright © 2010 Pearson Education,
Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 7
Globalization Drivers I
Remove barriers to trade
and investment
GATT
WTO
Regional trade
agreements
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International Business 5e
Chapter 1 - 8
Trade Exceeds Output
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Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 9
Globalization Drivers II
Technological Innovation
Email and
videoconferencing
Better
coordination
and control
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Internet, intranets,
and extranets
Transportation
advancements
Improved
communications
and management
More efficient,
dependable
shipping
International Business 5e
Chapter 1 - 10
Measuring Globalization
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International Business 5e
Chapter 1 - 11
Globalization Then and Now
Highly mobile
labor market
Fear of jobs
moving abroad
Free-flowing
capital and trade
Backlash among
the disaffected
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Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 12
From Anarchy to Debate
Rage
Reason
Violence
Legitimacy
Carnage
Civility
Exclusion
Debate
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Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 13
Jobs and Wages
Supporters
Opponents

Eliminates jobs in
developed nations

Lowers wages in
developed nations

Exploits workers in
developing nations
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Inc. publishing as Prentice Hall

Increases wealth and
efficiency everywhere

Generates labor market
flexibility in developed
countries

Advances economies
of developing nations
International Business 5e
Chapter 1 - 14
Labor, Environment, & Markets
Opponents
– Globalization lowers
labor standards
– Weakens protection of
the environment
Supporters
+ Investment raises
labor standards
+ Open economies most
environment friendly
– Exploits workers in
+ Companies concerned
poor nations
for future markets
Copyright © 2010 Pearson Education,
Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 15
Advice of Global Managers

Communicate effectively

Know the customer

Emphasize global awareness

Market effectively

Monitor business environments

Analyze problems correctly
Copyright © 2010 Pearson Education,
Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 16
Income
Inequality
Income
Inequality
debate
1
2
Inequality within nations
Poor people in developing
nations benefit most from
an open economy
Inequality between nations
Nations open to world trade
and investment grow faster
than rich nations
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3
Global inequality
Inequality has fallen, but
experts disagree on the
extent of the decline
International Business 5e
Chapter 1 - 17
National Sovereignty
Opponents
Supporters
Supranational
institutions reduce
autonomy of national,
regional, and local
governments
Globalization has
benefited societies by
helping to spread
democracy worldwide
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Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 18
Impact on Culture
Supporters
Opponents
•
Destroys cultural
diversity
•
Specialize and trade
to obtain other goods
•
Homogenizes our
world
•
Import cultural goods
from other nations
•
Bankrupts local
small businesses
•
Protects deeper moral
and cultural norms
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Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 19
Culture Matters:
The Global Consumer
Material Desire
Artistic Influence
Western Values
A Force for Good
Deeper Values
Copyright © 2010 Pearson Education,
Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 20
International Business Players
Multinational
Corporation
Business that has
direct investments
abroad in multiple
countries
Small Businesses
and Entrepreneurs
Small companies and
individuals becoming
increasingly active in
international trade
and investment
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Inc. publishing as Prentice Hall
Born Global
Firm
Adopts a global
perspective and
engages in international
business from or near
its inception
International Business 5e
Chapter 1 - 21
How They Stack Up
Comparing
revenue of
the world's
10 most
global firms
to the gross
domestic
product of
nations
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Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 22
Facts of Small Biz Exporting
Most exporters have
fewer than 50 employees
Comprehensive help
is available
Export financing
is available
Most products do not
need an export license
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Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 23
Global Business Environment
Copyright © 2010 Pearson Education,
Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 24
Chapter Review
• Describe the process of globalization
• Explain how globalization affects markets
and production
• Identify two drivers of globalization
• Summarize the globalization debate
• List types of firms in international business
• Describe the global business environment
Copyright © 2010 Pearson Education,
Inc. publishing as Prentice Hall
International Business 5e
Chapter 1 - 25
Globalization
Copyright © 2010 Pearson Education,
Inc. publishing as Prentice Hall
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Printed in the United States of America.
Copyright © 2010 Pearson Education, Inc.
publishing as Prentice Hall