© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. 1 chapter Globalization McGraw-Hill/Irwin Global Business Today, 5e © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

Chapter 1: Globalization INTRODUCTION Globalization: the trend towards a more integrated global economic system.

Chapter 1: Globalization WHAT IS GLOBALIZATION? Globalization refers to the shift towards a more integrated and interdependent world economy. The Globalization of Markets The Globalization of Production

Chapter 1: Globalization THE EMERGENCE OF GLOBAL INSTITUTIONS Global institutions: help manage, regulate, and police the global market place promote the establishment of multinational treaties to govern the global business system

Chapter 1: Globalization DRIVERS OF GLOBALIZATION Two macro factors underlie the trend toward greater globalization: Declining Trade and Investment Barriers The Role of Technological Change

Chapter 1: Globalization THE CHANGING DEMOGRAPHICS OF THE GLOBAL ECONOMY In the 1960s: The U.S. dominated the world economy and the world trade picture U.S. multinationals dominated the international business scene About half the world – the centrally planned economies of the communist world – was off limits to Western international business

Chapter 1: Globalization The Changing World Output and World Trade Picture The Changing Foreign Direct Investment Picture The Changing Nature of the Multinational Enterprise The Changing World Order The Global Economy of the 21st Century

A new breed of multinational company has emerged

Chapter 1: Globalization THE GLOBALIZATION DEBATE Is the shift toward a more integrated and interdependent global economy a good thing?

Chapter 1: Globalization Antiglobalization Protests Globalization, Jobs, and Incomes Globalization, Labor Policies, and the Environment Globalization and National Sovereignty Globalization and the World’s Poor

Chapter 1: Globalization MANAGING IN THE GLOBAL MARKETPLACE Managing an international business (any firm that engages in international trade or investment) is different from managing a domestic business because: Countries differ Managers face a greater and more complex range of problems International companies must work within the limits imposed by governmental intervention and the global trading system International transactions require converting funds and being susceptible to exchange rate changes