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INTERNATIONAL BUSINESS

GLOBALIZATION Global Business Environment CHAPTER I GLOBALIZATION Global Business Environment

Learning Objectives Describe the process of globalization and how it affects markets and production. Identify the two forces causing globalization to increase. Summarize the evidence for each main argument in the globalization debate. Identify the types of companies that participate in international business. Describe the global business environment and identify its four main elements.

International Business

International Business

International Business

International Business

International Business

What is International Business? Any commercial transactions that crosses the borders of two or more nations.

International Business E- business (e-commerce) Purchase, sale, or exchange of goods and services, as well as servicing customers, collaboration with business partners, and transactions within a company via computer networks.

International Business Imports All goods and services brought into a country that are acquired from organizations located abroad. Exports All goods and services produced or based in one country that are sold abroad.

Going International Legal & Political Social & Cultural differences Economic Differences Legal & Political

Going International Economic Differences Legal & Political

Going International Legal & Political Economic Differences http://vietnamnet.vn/chinhtri/2009/05/846521/ http://www.vietnamembassy-israel.org/vi/vnemb.vn/tin_hddn/ns090522110235

Going International

Globalization Trend toward greater Economic , Cultural, Political, and Technological interdependence among national institutions and economies.

Globalization of Markets Globalization of Markets refers to convergence in buyer preferences in markets around the world. This trend is occurring in many product categories, including consumer goods, industrial products and business services.

Benefits of Globalization of Markets Reduces marketing costs. Creates New Market Opportunities. Levels Uneven Income Streams. Yet Local Needs are Important.

Globalization of Production Globalization of Production refers to the dispersal of production activities to locations that help a company achieve its costs –minimization or quality- maximization objectives for a good or service.

Benefits of Globalization of Production Provides access to Low-Cost Workers. Provides access to Technical Expertise. Provides access to Production Inputs.

Forces Driving Globalization Falling Barriers to Trade & Investment Technological Innovation Measuring Globalization

Falling Barriers to Trade & Investment General Agreement on Tariffs & Trade (GATT) World Trade Organization (WTO) Regional Trade Agreements Trade Agreements & Trade Growth

Falling Barriers to Trade & Investment GATT (General Agreement on Tariffs & Trade ) Treaty designed to promote free trade by reducing both tariffs and non-tariff barriers to International trade. + 1947: 23 Nations + 1994: 123 Nations

Falling Barriers to Trade & Investment WTO (World Trade Organization) International Organization that regulates trade between nations. Established: 1 January 1995 153 members (July 2008) Location: Geneva, Switzerland Website: www.wto.int

WTO

Falling Barriers to Trade & Investment Regional Trade Agreements NAFTA (North American Free Trade Agreement) EU (European Union) APEC (Asia Pacific Economic Co-orperation).

Regional Trade Agreements NAFTA (North American Free Trade Agreement) Establishment: 1 January, 2004 Members: 3 Website: http//www.nafta-sec-alena.org is the trade bloc in North America created by the North American Free Trade Agreement (NAFTA)

Regional Trade Agreements

Regional Trade Agreements EU (European Union) (Brussels) Establishment: + 1957 European Commission (EC) + 1993 European Union (EU) Members: 27 Website: eurid.eu is a political and economic community of 27 member states, located primarily in Europe.

Regional Trade Agreements

Regional Trade Agreements Brussels is home to the council and commission

Regional Trade Agreements APEC (Asia Pacific Economic Coorperation) Establishment: 1989 Members: 21 Headquarter: Singapore Website: http//www.apec.org

Regional Trade Agreements

Regional Trade Agreements APEC 2006 (VIETNAM)

Regional Trade Agreements APEC 2006 (VIETNAM)

Trade Agreements and Trade Growth GDP (Gross Domestic Product). Value of all goods and services produced by a country’s domestic economy over a 1-year period. GNP (Gross National Product) Value of all goods and services produced by a country during a 1-year period, including income generated by both domestic and International activities. GDP or GNP per Capita Nation’s GDP or GNP divided by its population.

Technological Innovation E-mail and Videoconferencing Internet and World Wide Web Company Intranets and Extranets Advancements in Transportation Technologies

Measuring Globalization Political engagement Technological connectivity Economic Integration Personal contact

Measuring Globalization Globalization’s Top 20

Untangling the Globalization Debate Today’s Globalization in Context The current Globalization Backlash. Globalization’s Impact on Jobs and wages. Globalization’s Impact on Labor and Environmental Regulation. Globalization & Income Inequality. Globalization & National Sovereignty. Globalization’s Influence on Cultures.

Today’s Globalization in Context First World War Second World War The cold war Russian Revolution The Great Depression The collapse of the Wall Berlin. The threw off the chain of communism Embrace freedom, Democratic institutions, and Free market Trade, capital and labors flow more freely

The current Globalization Backlash World Bank (WB) Agency created to provide financing for national economic development efforts.

The current Globalization Backlash International Monetary Fund (IMF) Agency created to regulate fixed exchange rates and enforce the rules of the international monetary system.

Globalization’s Impact on Jobs and wages Globalization Costs Jobs & Lowers Wages Eliminates jobs in developed Nations. Forces Wages lower in developed Nations Exploits workers in Developing Nations

Globalization’s Impact on Jobs and wages Globalization Creates Jobs & Boosts Wages Increases Wealth & Efficiency Generates Labor Market Flexibility Creates Jobs in Developed Nations Advances Developing Nations’ Economies Summary of the jobs & Wages Debate

Globalization’s Impact on Labor & Environmental Regulation Labor Standards Environmental Protection Developing Future Markets

Globalization & Income Inequality Inequality within Nations Inequality between Nations Global Inequality

Globalization & National Sovereignty Globalization: Menace to Democracy Globalization: Guardian of Democracy

Key Players in International Business Multinational Corporation (MNC) Business that has direct investments abroad in multiple countries. Entrepreneurs & Small Businesses Born- Global Firm: Company that takes a global perspective on its market and engages in international business from or near its inception

Why International Business Is Special The Global Business Environment The Forces of Globalization Many National Business Environment The International Business Environment International Firm Management The Road Ahead for International Business

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