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INTERNATIONAL BUSINESS

INTERNATIONAL BUSINESS. International Political Economy Trade & Security Issues Trends Cultural Experiences International Career Preparation. International Political Economy. International Political Economy. Sovereignty-at-Bay Theory

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INTERNATIONAL BUSINESS

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  1. INTERNATIONAL BUSINESS • International Political Economy • Trade & Security Issues • Trends • Cultural Experiences • International Career Preparation

  2. International Political Economy

  3. International Political Economy • Sovereignty-at-Bay Theory • R. Vernon 1972; Nation-States in decline, International Community now supersedes • Hegamonic Stability Theory • Hegemony is an aberration over total time. • Military overstretch, economic power has declined to the point that it can not support the military. • Britain v. US v. ? • Dependency Theory • Critique of capitalism. North siphons money from the South (LDCs).

  4. Country Analysis Framework • Three interrelated components: strategy, performance, and context. Each of these has economic, political, and social dimensions (goals). • Country risk appraisal (opportunities for those willing to take risks.) • Increasingly, capital and talent know no national allegiance, host countries must attract “players” who have access to capital, ideas, markets, and talents.

  5. Trade & Security Issues • America’s military umbrella in Asia has provided leverage in negotiations of GATT/WTO. • Security concerns rather than trade issues are driving America’s Asian policy. • ASEAN nations are building up military strength, but have yet to formalize military treaties out of fear of antagonizing Beijing. • Singapore could supplant Hong Kong as THE regional trading center.

  6. Trade & Security Issues • Economic recovery is allowing Japan to take a firmer stance on trade issues with the US. • Malaysia positioned to be a dominate player in S.E. Asia because of its wide-reaching ethic mix, (Malays, Chinese, Indians). • India’s population could surpass China’s by 2020. • PRC MFN Status - US business are losing $2.47 B/yr. to pirates.

  7. Trends • Modernization of Asia - MegaTrends* • “The modernization of Asia - economically, politically and culturally - is by far the most important event taking place in the world today.” • Within 5 yrs. Asia’s combined GNP will be double that of Europe and will represent one third of the entire world economy. * Megatrends Asia, John Naisbitt, 1996

  8. Trends • “The modernization of Asia must not be thought of as the Westernization of Asia, but the modernization of Asia in the ‘Asia way’.” • “The West now needs the East a lot more than the East needs the West.” • Chinese global power: Network of overseas Chinese is greater than China.

  9. Eight Asian Megatrends/MajorShifts* • From Nation-States to Networks • From Traditions to Options • From Export-Led to Consumer-Driven • From Government-Controlled to Market-Driven • From Farms to Supercities • From Labor-Intensive to High Technology • From Male Dominance to the Emergence of Women • From West to East * Megatrends Asia, John Naisbitt, 1996

  10. Capitalism’s competitors - facism, socialism, and communism - are for the most part gone.* • The world economy is slowing down. Growth adjusted for inflation is: • 1960’s - 5% • 1970’s - 3.6% • 1980’s - 2.8% • 1990’s ~ 2.0% • Is the engine of international economic power running out of fuel? Has the lack of “competition” caused capitalism to wane? * The Future of Capitalism, Lester Thurow, 1996

  11. The Russian Wildcard • Running a business in the former USSR is hard where historically quality does not matter & profits are irrelevant. • Political uncertainty stymies foreign direct investments. If you are already there, you can not pull out and expect to get back in easily. • Just like China, Russia is land of (potential) opportunity.

  12. The Russian Wildcard • Different orientation than the West; the worker is important not the customer. Customer service can be a big differentiator. Russians have fewer casual acquaintances than Americans, but they are closely knit within their own circle. One must ask employees to include the customer in the inner circle. • Just because Russians look like Westerners does not mean they think or are oriented like Westerners. (Applies equally for English/Irish, etc.) In every society you will cultivate relationships, negotiate, and conduct business differently than in the U.S.

  13. Cultural Experiences • Intel International Locations • Faux Paux Opportunities Abound • Preparation (Craighead’s Country Report, BYU Culturgram, Country Specific Books, Interviews)

  14. International Career Preparation • Self examination - do you have a high degree of ethnocentricity? • Language interest/study critical • Take as many undergrad preparatory classes as possible. • An international Masters program will open doors.

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