1、International Business 11eBy Charles W.L. HillCopyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Chapter 1GlobalizationCopyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or dist
2、ribution without the prior written consent of McGraw-Hill Education.1-3Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.What Is Globalization?Globalization - the shift toward a more integrated and in
3、terdependent world economyThe world is moving away from self-contained national economies toward an interdependent, integrated global economic system1-4Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Educatio
4、n.What Is The Globalization of Markets?Historically distinct and separate national markets are merging It no longer makes sense to talk about the “German market” or the “American market”Instead, there is the “global market” falling trade barriers make it easier to sell globally consumers tastes and
5、preferences are converging on some global norm firms promote the trend by offering the same basic products worldwide1-5Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.What Is The Globalization of Ma
6、rkets?Firms of all sizes benefit and contribute to the globalization of markets 97% of all U.S. exporters have less than 500 employees 98% of all small and mid-sized German companies participate in international markets1-6Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or
7、distribution without the prior written consent of McGraw-Hill Education.What Is The Globalization of Production?Firms source goods and services from locations around the globe to capitalize on national differences in the cost and quality of factors of production like land, labor, energy, and capital
8、Companies can lower their overall cost structure improve the quality or functionality of their product offering1-7Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Why Do We Need Global Institutions?G
9、lobal institutions help manage, regulate, and police the global marketplace promote the establishment of multinational treaties to govern the global business system1-8Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGra
10、w-Hill Education.Why Do We Need Global Institutions?Examples include the General Agreement on Tariffs and Trade (GATT) the World Trade Organization (WTO) the International Monetary Fund (IMF) the World Bank the United Nations (UN) the G201-9Copyright 2017 McGraw-Hill Education. All rights reserved.
11、No reproduction or distribution without the prior written consent of McGraw-Hill Education.What Do Global Institutions Do?The World Trade Organization (like its predecessor GATT) polices the world trading system makes sure that nation-states adhere to the rules laid down in trade treaties promotes l
12、ower barriers to trade and investment 159 members in 20131-10Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.What Do Global Institutions Do?The International Monetary Fund (1944) maintains order in
13、the international monetary system lender of last resort for countries in crisis Argentina, Indonesia, Mexico, Russia, South Korea, Thailand, Turkey, Ireland, and GreeceThe World Bank (1944) promotes economic development via low interest loans for infrastructure projects1-11Copyright 2017 McGraw-Hill
14、 Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.What Do Global Institutions Do?The United Nations (1945) maintains international peace and security develops friendly relations among nations cooperates in solving internationa
15、l problems and in promoting respect for human rights is a center for harmonizing the actions of nationsThe G20 forum through which major nations tried to launch a coordinated policy response to the 2008-2009 global financial crisis1-12Copyright 2017 McGraw-Hill Education. All rights reserved. No rep
16、roduction or distribution without the prior written consent of McGraw-Hill Education.What Is Driving Globalization?Declining barriers to the free flow of goods, services, and capital average tariffs are now at just 4% more favorable environment for FDI global stock of FDI was $20.4 trillion in 2011
17、facilitates global productionTechnological change microprocessors and telecommunications Internet: information backbone of the global economy transportation technology 1-13Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
18、McGraw-Hill Education.What Does Globalization Mean For Firms?Lower barriers to trade and investment mean firms can view the world, rather than a single country, as their market base production in the optimal location for that activityBut, firms may also find their home markets under attack by foreig
19、n firms1-14Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Declining Trade And Investment BarriersAverage Tariff Rates on Manufactured Products as Percent of Value 1-15Copyright 2017 McGraw-Hill Edu
20、cation. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.What Does Globalization Mean For Firms?Technological change means lower transportation costs help create global markets and allow firms to disperse production to economical, geogra
21、phically separate locations low cost information processing and communication firms can create and manage globally dispersed production low cost global communications networks help create an electronic global marketplace global communication networks and global media create a worldwide culture and a
22、 global consumer product market 1-16Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.The Changing Demographics Of The Global Economy Four trends are important: 1. The changing world output and world
23、trade picture2. The changing foreign direct investment picture3. The changing nature of the multinational enterprise4. The changing world order1-17Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.How
24、 Has World Output And World Trade Changed?In 1960, the U.S. accounted for almost 40% of world economic activity, but by 2012, the U.S. accounted for just 23% a similar trend occurred in other developed countriesIn contrast, the share of world output accounted for by developing nations is rising expe
25、cted to account for more than 60% of world economic activity by 20201-18Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.How Has World Output And World Trade Changed?The Changing Demographics of Worl
26、d Output and Trade 1-19Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.How Has Foreign Direct Investment Changed Over Time?In the 1960s, U.S. firms accounted for about two-thirds of worldwide FDI fl
27、ows Today, the United States accounts for less than one-fifth of worldwide FDI flows Other developed countries have followed a similar patternIn contrast, the share of FDI accounted for by developing countries has risen Developing countries, especially China, have also become popular destinations fo
28、r FDI1-20Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.How Has Foreign Direct Investment Changed Over Time?Percentage Share of Total FDI Stock 1980-2013 1-21Copyright 2017 McGraw-Hill Education. A
29、ll rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.How Has Foreign Direct Investment Changed Over Time?FDI Inflows 1980-2013 1-22Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior wr
30、itten consent of McGraw-Hill Education.What Is A Multinational Enterprise?Multinational enterprise (MNE) - any business that has productive activities in two or more countriesSince the 1960s the number of non-U.S. multinationals has risen the number of mini-multinationals has risen1-23Copyright 2017
31、 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.The Changing World OrderMany former Communist nations in Europe and Asia are now committed to democratic politics and free market economies creates new opportunitie
32、s for international businesses but, there are signs of growing unrest and totalitarian tendencies in some countries China and Latin America are also moving toward greater free market reforms between 1983 and 2010, FDI in China increased from less than $2 billion to $100 billion annually but, China a
33、lso has many new strong companies that could threaten Western firmsHisense CEO Zhou Houjian led his company to become one of Chinas top-selling electronics manufacturers by using a strategy of rapid innovation and low-cost manufacturing. If you were given the chance to run a leading electronics comp
34、any, would you use a similar approach to grow your brand? Or would you devote more time to research and development and produce fewer products at a higher price point? 1-24Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
35、McGraw-Hill Education.1-25Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.How Will The Global Economy Of The 21st Century Look?The world is moving toward a more global economic systemBut globalizati
36、on is not inevitable there are signs of a retreat from liberal economic ideology in RussiaGlobalization brings risks the financial crisis that swept through South East Asia in the late 1990s the recent financial crisis that started in the U.S. in 2008-2009, and moved around the world1-26Copyright 20
37、17 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.Is An Interdependent Global Economy A Good Thing?Supporters believe that increased trade and cross-border investment mean lower prices for goods and services grea
38、ter economic growth higher consumer income, and more jobsCritics worry that globalization will cause job losses environmental degradation the cultural imperialism of global media and MNEsAnti-globalization protesters now regularly show up at most major meetings of global institutions 1-27Copyright 2
39、017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.How Does Globalization Affect Jobs And Income?Critics argue that falling barriers to trade are destroying manufacturing jobs in advanced countriesSupporters cont
40、end that the benefits of this trend outweigh the costs countries will specialize in what they do most efficiently and trade for other goodsand all countries will benefit1-28Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of
41、 McGraw-Hill Education.How Does Globalization Affect Labor Policies And The Environment?Critics argue that firms avoid the cost of adhering to labor and environmental regulations by moving production to countries where such regulations do not exist, or are not enforcedSupporters claim that tougher e
42、nvironmental and labor standards are associated with economic progress as countries get richer from free trade, they implement tougher environmental and labor regulations1-29Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent o
43、f McGraw-Hill Education.How Does Globalization Affect National Sovereignty? Is todays global economy shifting economic power away from national governments toward supranational organizations like the WTO, the EU, and the UN? Critics argue that unelected bureaucrats have the power to impose policies
44、on the democratically elected governments of nation-states Supporters claim that the power of these organizations is limited to what nation-states agree to grant the power of the organizations lies in their ability to get countries to agree to follow certain actions1-30Copyright 2017 McGraw-Hill Edu
45、cation. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.How Is Globalization Affecting The Worlds Poor?Is the gap between rich nations and poor nations getting wider?Critics believe that if globalization was beneficial there should not
46、be a divergence between rich and poor nationsSupporters claim that the best way for the poor nations to improve their situation is to reduce barriers to trade and investment implement economic policies based on free market economies receive debt forgiveness for debts incurred under totalitarian regi
47、mes1-31Copyright 2017 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.How Does The Global Marketplace Affect Managers?Managing an international business differs from managing a domestic business because countries
48、are different the range of problems confronted in an international business is wider and the problems more complex than those in a domestic business firms have to find ways to work within the limits imposed by government intervention in the international trade and investment system international transactions involve converting money into different currencies
