1. Globalization Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall

2. International Business 5e Chapter 1 - 2 Describe the process of globalization Explain how globalization affects markets and production Identify two drivers of globalization Summarize the globalization debate List types of firms in international business Describe the global business environment Chapter Preview

3. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 3 Globalization Involves Us All We experience international transactions daily Imports and exports reach even remote areas Technology and e-biz promote trade Consumers and companies pull markets closer

4. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 4 International Business

5. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 5 Globalization Trend toward greater economic, cultural, political and technological interdependence among national institutions and economies Globalization of markets Convergence in buyer preferences in markets around the world Globalization of production Dispersal of production activities worldwide to minimize costs or maximize quality

6. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 6 Benefits of Globalization Globalization of markets Globalization of production Reduces marketing costs New market opportunities Levels income stream Reduces marketing costs New market opportunities Levels income stream Access lower-cost labor Access technical expertise Access production inputs Access lower-cost labor Access technical expertise Access production inputs

7. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 7 Challenges to Business Physical security Digital security Reputational risk Examine company vulnerability and create a disaster recovery plan Guard proprietary information and confidential communications Require ethical and lawful behavior from all employees and business partners

8. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 8 Globalization Drivers I Regional trade agreements GATT WTO Remove barriers to trade and investment

9. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 9 Trade Exceeds Output

10. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 10 Globalization Drivers II Technological Innovation Email and videoconferencing Internet, intranets, and extranets Transportation advancements Better coordination and control Improved communications and management More efficient, dependable shipping

11. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 11 Measuring Globalization

12. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 12 Globalization Then and Now Highly mobile labor market Fear of jobs moving abroad Backlash among the disaffected Free-flowing capital and trade

13. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 13 From Anarchy to Debate Violence Rage Carnage Exclusion Legitimacy Reason Civility Debate

14. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 14 Jobs and Wages  Eliminates jobs in developed nations  Lowers wages in developed nations  Exploits workers in developing nations  Increases wealth and efficiency everywhere  Generates labor market flexibility in developed countries  Advances economies of developing nations Supporters Opponents

15. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 15 Labor, Environment, & Markets – Globalization lowers labor standards – Weakens protection of the environment – Exploits workers in poor nations + Investment raises labor standards + Open economies most environment friendly + Companies concerned for future markets OpponentsSupporters

16. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 16 Advice of Global Managers Communicate effectively Know the customer Emphasize global awareness Market effectively Monitor business environments Analyze problems correctly

17. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 17 Income Inequality debate Inequality within nations Poor people in developing nations benefit most from an open economy Inequality between nations Nations open to world trade and investment grow faster than rich nations Global inequality Inequality has fallen, but experts disagree on the extent of the decline Income Inequality 3 2 1

18. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 18 National Sovereignty Supporters Globalization has benefited societies by helping to spread democracy worldwide Opponents Supranational institutions reduce autonomy of national, regional, and local governments

19. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 19 Impact on Culture Opponents Destroys cultural diversity Homogenizes our world Bankrupts local small businesses Supporters Specialize and trade to obtain other goods Import cultural goods from other nations Protects deeper moral and cultural norms

20. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 20 Culture Matters: The Global Consumer Material Desire A Force for Good Artistic Influence Deeper Values Western Values

21. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 21 International Business Players Business that has direct investments abroad in multiple countries Small companies and individuals becoming increasingly active in international trade and investment Adopts a global perspective and engages in international business from or near its inception Multinational Corporation Small Businesses and Entrepreneurs Born Global Firm

22. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 22 How They Stack Up Comparing revenue of the world's 10 most global firms to the gross domestic product of nations

23. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 23 Facts of Small Biz Exporting Most exporters have fewer than 50 employees Comprehensive help is available Most products do not need an export license Export financing is available

24. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 24 Global Business Environment

25. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall International Business 5e Chapter 1 - 25 Describe the process of globalization Explain how globalization affects markets and production Identify two drivers of globalization Summarize the globalization debate List types of firms in international business Describe the global business environment Chapter Review

26. Globalization Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall

27. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall