1. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three chapter eight Concept Preview After reading this chapter, you should be able to: 1. appreciate the relevance to business people of our elements of four elements of geography: (1) location (2) topography (3) climate and (4) natural resources 2. understand the importance of a country’s location in political and trade relationships 3. understand how surface features contribute to economic, cultural, political and social differences among nations and among regions of a single country 4. comprehend the importance of inland waterways and outlets to the sea Physical and Environmental Forces

2. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three chapter eight Concept Preview continued After reading this chapter, you should be able to: 5. recognize that climate exerts a broad influence on business 6. understand why managers must monitor changes in the discovery and the use of mineral resources and energy resource 7. understand why managers must be alert to changes in a nation’s infrastructure 8. appreciate the impact of industrial disasters such as the Alaskan oil spill and the Bhopal accident on global and multinational firms Physical and Environmental Forces

3. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three 8-3 Physical and Environmental Forces  Location  explains many trade and political relationships  Austria in the cold war  U.S. major trading partners  Topography  surface features of a region  mountains—divides market  plains—elevation and climate  deserts & rain forests—concentrates population  bodies of water—agriculture and transportation

4. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three Physical and Environmental Forces  Climate  meteorological conditions including temperature, precipitation, and wind, that prevail in a region  sets limits—physical and economic  relationship to economic development  health  affects  product mix  production  inventory costs 8-4

5. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three Physical and Environmental Forces  Natural resources  supply of exhaustible minerals and mineral fuels  energy  petroleum  conventional sources  unconventional sources  natural gas  coal and nuclear power  renewable energy sources  non-fuel minerals  changes make monitoring necessary 8-5

6. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three Costs of Generating Electricity in the U.S. per kilowatt hour for various fuels Coal4-5¢Wind4-7¢ Gas3-5¢Biomass6-8¢ Hydro4-7¢Solar10-12¢ Geothermal5-8¢Photovoltaic30-40¢ 8-6

7. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three U.S. and World Energy Supplies by Source Oil & Gas 49.9% Oil & Gas 60.3% Coal 30.8% Coal 31.5% Hydroelectric 4.5% Hydroelectric 7.0% Nuclear 10.1% Nuclear 6.4% Other renewables 1.1% 8-7 Figure 8.8 UNITED STATESWORLD Sources: “Table1-1: Energy Overview,” Annual Energy Review, ftp://ftp.eia.doe.gov/pub/energy.overview/aer/038495d3.pdf; and “Table11.2: World Primary Energy Production by Source,” Annual Energy Review, fttp://ftp.eia.doe.gov/pub/energy/overview/aer/03849mt.pdf (December 29, 1997). Other renewables 4.7%

8. Irwin/McGraw-Hill © The McGraw-Hill Companies, Inc., 1999 section three 8-8 Physical and Environmental Forces  Destruction of natural resources  pollution  Bhopal gas leak  Chernobyl nuclear disaster  Alaskan oil spill  Iraqi eco-terrorism  laws, controls and inspections