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Chapter 1 Globalization

Chapter 1 Globalization. Chapter Preview. Describe globalization Explain how globalization affects markets and production Identify the drivers of globalization Discuss the globalization debate List types of firms in international business Define the global business environment.

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Chapter 1 Globalization

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  1. Chapter 1Globalization

  2. Chapter Preview • Describe globalization • Explain how globalization affects markets and production • Identify the drivers of globalization • Discuss the globalization debate • List types of firms in international business • Define the global business environment International Business 4e

  3. We experience international transactions daily Imports and exports reach even remote areas Technology and e-biz promote trade Consumers and companies pull markets closer Globalization Involves Us All International Business 4e

  4. International Business International Business 4e

  5. Globalization Trend toward greater economic, cultural, political, and technological interdependence among national institutions and economies Globalization of production Dispersal of production activities worldwide to minimize costs or maximize quality Globalization of markets Convergence in buyer preferences in markets around the world International Business 4e

  6. Benefits of Globalization Globalization of markets Globalization of production • Reduces marketing costs • New market opportunities • Levels income stream • Access low-cost labor • Access technical expertise • Access production inputs International Business 4e

  7. Advice of Global Managers • Know the customer • Emphasize global awareness • Develop world-class products • Market effectively • Improve logistics • Analyze problems correctly International Business 4e

  8. GATT WTO Regional trade agreements Globalization Drivers I Remove barriers to trade and investment International Business 4e

  9. Trade Exceeds Output International Business 4e

  10. Globalization Drivers IITechnological Innovation E-mail and videoconferencing Internet, intranets, and extranets Transportation advancements Better coordination and control Improved communications and management More efficient, dependable shipping International Business 4e

  11. Top 20 Global Nations International Business 4e

  12. Globalization Then and Now Highly mobile labor market Fear of jobs moving abroad Free-flowing capital and trade Backlash among the disaffected International Business 4e

  13. 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 Physical security Digital security Reputational risk Challenges to Business International Business 4e

  14. From Anarchy to Debate Rage Reason Violence Legitimacy Carnage Civility Exclusion Debate International Business 4e

  15. Jobs and Wages Supporters Opponents • Increases wealth and efficiency • Generates labor market flexibility • Creates jobs in developed countries • Advances economies of developing nations • Eliminates jobs in developed nations • Forces wages lower in developed nations • Exploits workers in developing nations International Business 4e

  16. Labor and Environment Opponents Supporters • Investment raises labor standards • Open economies most environment friendly • Companies concerned for future markets • Globalization lowers labor standards • Weakens protection of the environment • Exploits workers in poor nations International Business 4e

  17. Income Inequality Income Inequality debate 1 Inequality within nations Poor people in developing nations benefit most from an open economy 2 3 Inequality between nations Nations open to world trade and investment grow faster than rich nations Global inequality Inequality has fallen, but experts disagree on the extent of the decline International Business 4e

  18. National Sovereignty Opponents Supranational institutions reduce autonomy of national, regional, and local governments Supporters Globalization has benefited societies by helping to spread democracy worldwide International Business 4e

  19. Impact on Culture • Supporters • Specialize and trade to obtain other goods • Import cultural goods from other nations • Protects deeper moral and cultural norms • Opponents • Destroys cultural diversity • Homogenizes our world • Bankrupts local small businesses International Business 4e

  20. Culture Matters:Is Resistance Futile? The Same Everything? …or Cultures Flourishing? Values Gone for Good? …or a Force for Good? Finding Common Ground International Business 4e

  21. Multinational Corporation Small Businesses and Entrepreneurs Born-Global Firm Takes a global perspective on its market and engages in international business from inception Small companies and individuals becoming increasingly active in international trade and investment Business that has direct investments abroad in multiple countries International Business Players International Business 4e

  22. How They Stack Up Comparing revenue of the world's 10 most global firms to the gross domestic product of nations International Business 4e

  23. Global Business Environment International Business 4e

  24. Chapter Review • Describe globalization • Explain how globalization affects markets and production • Identify the drivers of globalization • Discuss the globalization debate • List types of firms in international business • Define the global business environment International Business 4e

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