INTERNATIONAL BUSINESS F International Political Economy F Trade & Security Issues F Trends F Cultural Experiences F International Career Preparation

International Political Economy

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

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

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

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

Trends F 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

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.

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

F Capitalism’s competitors - facism, socialism, and communism - are for the most part gone.* F 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% F 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

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

The Russian Wildcard F 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. F 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.

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

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