2. © 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.

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

4. 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

5. 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

6. 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

7. 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

8. 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

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

10. 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

11. 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