Chapter 20

1. Chapter 20 New Horizons

2. Learning Objectives • Understand the many changing dimensions that shape international business. • Learn about and evaluate the international business forecasts made by a panel of experts. • Be informed about different career opportunities in international business.

3. New Horizons • The International Business Environment • Globalization and Trade Negotiations • Government Policy • The Future of International Business Management • Careers in International Business

4. The International Business Environment Conditions of Change in: • Politics • Finance • Society • Technology

5. The Political Environment Transformations • Reshaping of existing political blocks. • Formation of new groupings. • Breakup of old coalitions.

6. Planned Versus Market Economies • Eastern and Central Europe will continue to be attractive for international investment. • The distinction between developed and less-developed countries is unlikely to change. • Environmental protection will be a major force in economic growth. • Much of the growth of the global economy will be fueled by the emerging markets of the Asia Pacific region.

7. A Divergence of Values • Nations hold differing values and priorities. • Divergence of values will require readjustment of activities of the international corporation.

8. International Finance • Debt constraints and low commodity prices impose slow growth prospects for developing countries. • Developed nations have an incentive to help debtor nations. • The United States is the largest debtor nation in the world.

9. Effects of Population Shifts • Population increase will become a national priority in the industrialized world. • Population stabilization continues to be the challenge in the developing world.

10. Technological Environment • Internet is democratizing global business. • Small/medium-sized enterprises can now be full participants in the global marketplace. • High technology is a controversial area of economic activity.

11. Globalization and Trade Negotiations Globalization will continue and trade negotiations will continue to experience difficulties.

12. Globalization and Trade Negotiations • Long-term differentiation of countries and firms includes: Those Who Grow Those Who Create Those Who Make Those Who Coordinate

13. Government Policy • International trade activity now affects domestic policy more than ever. • Governments will need to coordinate policies that affect the international business environment. • Policymakers need a better understanding of the nature of international trade issues.

14. The Future of International Business Management • Global change results in an increase in risk. • International markets remain a source of high profits. • International executives will need to balance the public and the private good.

15. International Product Policy • Environmental concern is a key issue affecting product planning. • Firms will have to plan for the “post-mortem” stage in the product life cycle. • Product life cycle will be measured in months or even weeks. • Companies will have to deliver more mass customization. • An increase will occur in the trend toward strategic alliance.

16. International Communications Advances made in international communications will have a profound impact on international management. Most affected will be members of the services sector.

17. Distribution Strategies • Innovation will determine new ways of serving markets. • More sophisticated distribution systems will also introduce new uncertainties such as risk due to distribution interruptions.

18. International Pricing • Will become increasingly heated. • Forward pricing will become increasingly difficult. • Price competition will be substantial. • Exchange rate movements may play a more significant role in maintaining competitiveness. • Nations will attempt to stimulate their international competitiveness through subsidization, targeting, or government contracts.

19. Careers in International Business-- To Prepare: • Be well versed in a specific functional business area. • Take summer internships abroad. • Take language courses. • Obtain further in-depth training by enrolling in International Business Courses!

20. Opportunities for Women in Global Management • In the mid-1980’s women held 3.3% of overseas positions in U.S. firms. • By 2000, 13% of expatriates were women. • Expatriates are not seen as women, but rather as “foreigners who happen to be women.” • Advantages are added visibility and increased access to clients.

21. Employment With A Large Firm • Employees are expected to be grounded in the practice and management of business. • Managers are sent abroad because the company expects him or her to reflect corporate spirit. • Employees returning from the international route may find few positions available back at headquarters.

22. Employment With A Small Firm • May have recently developed an international outlook. • With a more limited budget, most of the work may be done by mail, fax, e-mail, or by telephone. • International work may involve importing. • Small firms provide excellent training ground for international activities.

23. Self-EmploymentThe Opportunity to Become a True International Entrepreneur Specialized services that might be offered by a consultant include: international market research, international strategic planning, beginning-to-end assistance for international entry or international negotiations. There may be a higher degree of risk involved, but there is also an opportunity for higher rewards.