1. Chapter Four – Globalization PART ONE: TODAYS BUSINESS ENVIRONMENT

2. Chapter Learning Objectives Globalization: The Shrinking of Time and Distance Why and How Companies Conduct International Trade Conditions Affecting International Trade International Trade: Barriers and Facilitators Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4-2

3. The Global Workplace & E-Commerce Globalization: The results Development of the global workplace and electronic commerce Consolidation of many national markets into one big world market Development of two opposite kinds of international business: huge firms and quick, Internet-enabled small firms. E-commerce Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4-3

4. One Big Market Free Trade & the Global Economy Imports Exports Positive Effects Negative Effects Types of Businesses that Succeed Big Quick Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4-4

5. Conducting International Trade Trading with other countries No country is self-sufficient Some countries have natural resources other countries do not have Some countries have technology that other countries want Competitive advantage Absolute advantage Comparative advantage Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4-5

6. Balance of Trade, Payments & Countertrading Balance of Trade: Comparing exports & imports Trade surplus Trade deficit Balance of Payments: Comparing money in & money out Balance-of-payments surplus Balance-of-payments deficit Countertrading Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4-6

7. How Companies Enter Foreign Markets Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4-7

8. Conditions Affecting International Trade Cultural Conditions Verbal & nonverbal communication Time orientation Religion Economic Conditions Infrastructure, resources & development Currency exchange rates Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4-8

9. Conditions Affecting International Trade Political & Legal Conditions Political System: Democratic or Totalitarian? Political Stability: Whats the Risk? Approach to Corruption & Enforcement Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4-9

10. Barriers to International Trade Three Kinds of Trade Protectionism: Tariffs – taxes on imports Import Quotas – limits on how many products are allowed in Embargoes – bans on certain import or export products Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4-10

11. Organizations & Common Markets Organizations Facilitating International Trade: The World Trade Organization (WTO) The World Bank The International Monetary Fund (IMF) Common Markets NAFTA EU Mercosur APEC Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4-11

12. Learning Objectives Summary Globalization Companies Conducting International Trade Conditions Affecting International Trade Barriers and Facilitators Affecting International Trade Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4-12

13. Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall 4-13