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Globalization

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					Globalization
             Topic Preview
• Describe globalization
• Explain how globalization affects markets and
  production
• Identify the drivers of globalization
• Discuss the globalization debate
• List types of firms in international business
• Define the global business environment



                 GLOBAL BUSINESS ENVIRONMENT
GLOBAL BUSINESS ENVIRONMENT
GLOBAL BUSINESS ENVIRONMENT
GLOBAL BUSINESS ENVIRONMENT
             E-Biz Surprise
• eBay expanded all types of product
  markets
• Eli Lilly hired a virtual R&D “workforce”
• Expedia moved travel booking online
• Dell pioneered online buying of custom
  PCs




                GLOBAL BUSINESS ENVIRONMENT
    Advice of Global Managers

• Know the customer
• Emphasize global awareness
• Develop world-class products
• Market effectively
• Improve logistics
• Analyze problems correctly


             GLOBAL BUSINESS ENVIRONMENT
               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


                 GLOBAL BUSINESS ENVIRONMENT
    Benefits of Globalization
• Globalization of markets
  – Reduces marketing costs
  – New market opportunities
  – Levels income stream
• Globalization of production
  – Access low-cost labor
  – Acquire technical expertise
  – Obtain production inputs

             GLOBAL BUSINESS ENVIRONMENT
     Globalization Drivers I
• Remove barriers to trade / investment
  – GATT
  – WTO
  – Regional trade agreements




             GLOBAL BUSINESS ENVIRONMENT
      Globalization Drivers II
         Technological Innovation
• Email and videoconferencing
   – Better coordination and control
• Internet, intranets and extranets
   – Improved communications and
     management
• Transportation advancements
   – More efficient, dependable shipping

              GLOBAL BUSINESS ENVIRONMENT
    Globalization Then and Now
•   Highly mobile labor market
•   Fear of jobs moving abroad
•   Free-flowing capital and trade
•   Backlash among the disaffected




               GLOBAL BUSINESS ENVIRONMENT
      Challenges to Business
• Physical security
  – Assess company vulnerability and create a
    disaster recovery plan
• Digital security
  – Guard proprietary information and confidential
    communications
• Reputational risk
  – Require ethical and lawful behavior from all
    employees and business partners




                 GLOBAL BUSINESS ENVIRONMENT
   From Carnage to Civility
  – Rage
  – Violence
  – Carnage
  – Exclusion
Vs.
  – Reason
  – Legitimacy
  – Civility
  – Debate

            GLOBAL BUSINESS ENVIRONMENT
             Jobs and Wages
• Opponents
  – Eliminates jobs in developed nations
  – Forces wages lower in developed nations
  – Exploits workers in developing nations
• Supporters
  –   Increases wealth and efficiency
  –   Generates labor market flexibility
  –   Creates jobs in developed countries
  –   Advances economies of developing nations



                  GLOBAL BUSINESS ENVIRONMENT
     Labor and Environment
• Opponents
  – Globalization lowers labor standards
  – Weakens protection of the environment
  – Exploits workers in poor nations
• Supporters
  – Investment raises labor standards
  – Open economies most environment friendly
  – Companies concerned for future markets




                GLOBAL BUSINESS ENVIRONMENT
           Income Inequality
• Inequality within nations
   – Poor people in developing nations benefit
     most from 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


                 GLOBAL BUSINESS ENVIRONMENT
       National Sovereignty
• Opponents
  – Supranational institutions reduce autonomy of
    national, regional and local governments
• Supporters
  – Globalization has benefited societies by
    helping to spread democracy worldwide




                GLOBAL BUSINESS ENVIRONMENT
         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




                GLOBAL BUSINESS ENVIRONMENT
International Business Players
• Multinational Corporation
  – Business that has direct investments abroad in
    multiple countries
• Small Businesses and Entrepreneurs
  – Small companies and individuals becoming
    increasingly active in international trade and
    investment
• Born-Global Firm
  – Takes a global perspective on its market and
    engages in international business from or near
    its inception

                 GLOBAL BUSINESS ENVIRONMENT
    Global Business Environment

•   Globalization
•   International
•   National
•   Firm




                GLOBAL BUSINESS ENVIRONMENT

				
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posted:3/6/2012
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