Слайд 2What Is Globalization?
The world is moving away from self-contained national
economies toward an interdependent, integrated global economic system
Globalization refers to
the shift toward a more integrated and interdependent world economy
Globalization has two facets:
1) the globalization of markets
2) the globalization of production
http://www.youtube.com/watch?v=K7eRb8aLpNI
Слайд 3The Globalization Of Markets
The globalization of markets refers to the
merging of historically distinct and separate national markets into one
huge global marketplace
In many industries, it is no longer meaningful to talk about the “German market” or the “American market”
Instead, there is only the global market
http://news.bbc.co.uk/2/hi/in_depth/business/2008/the_box/default.stm
Слайд 4The Globalization Of Markets
Falling trade barriers make it easier to
sell internationally
The tastes and preferences of consumers are converging on
some global norm
Firms help create the global market by offering the same basic products worldwide
Слайд 5The Globalization Of Production
The globalization of production refers to the
sourcing of goods and services from locations around the globe
to take advantage of national differences in the cost and quality of factors of production like land, labor, and capital
Companies compete more effectively by lowering their overall cost structure or improving the quality or functionality of their product offering
Слайд 6The Emergence Of Global Institutions
Institutions are needed to:
help manage,
regulate, and police the global marketplace
promote the establishment of multinational
treaties to govern the global business system
Слайд 7The Emergence Of Global Institutions
Institutions created over the past
half century 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)
Слайд 8The Emergence Of Global Institutions
The World Trade Organization (like its
predecessor GATT) is primarily responsible for policing the world trading
system and making sure that nation-states adhere to the rules laid down in trade treaties signed by WTO members
In 2007, the 150 nations that accounted for 97% of world trade were WTO members
The WTO promotes lower barriers to trade and investment
Слайд 9The Emergence Of Global Institutions
The International Monetary Fund and the
World Bank were created in 1944
The IMF was established to
maintain order in the international monetary system
The World Bank was established to promote economic development
Слайд 10The Emergence Of Global Institutions
The United Nations was established in
1945 to:
maintain international peace and security
develop friendly relations among nations
cooperate
in solving international problems and in promoting respect for human rights
be a center for harmonizing the actions of nations
Слайд 11Drivers Of Globalization
Two macro factors underlie the trend toward
greater globalization:
the decline in barriers to the free flow of
goods, services, and capital that has occurred since the end of World War II
technological change
Слайд 12Declining Trade And
Investment Barriers
International trade occurs when a firm
exports goods or services to consumers in another country
Foreign direct
investment (FDI) occurs when a firm invests resources in business activities outside its home country
After World War II, advanced countries made a commitment to lower barriers to trade and investment
Since 1950, average tariffs have fallen significantly and are now at about 4%
Countries have also been opening markets to FDI
Слайд 13Declining Trade And
Investment Barriers
Table 1.1: Average Tariff Rates on
Manufactured Products as Percent of Value
Слайд 14Declining Trade And
Investment Barriers
Lower barriers to trade and investment
mean:
that firms can view the world, rather than a single
country, as their market
that firms can base production in the optimal location for that activity
Слайд 15The Role Of Technological Change
Technological change has made the
globalization of markets a reality
Important advances have occurred in:
microprocessors and
telecommunications
the Internet and World Wide Web
transportation technology
Слайд 16The Role Of Technological Change
Implications of technological change for the
globalization of production include:
lower transportation costs that enable firms to
disperse production to economical, geographically separate locations
lower information processing and communication costs that enable firms to create and manage globally dispersed production systems
Слайд 17The Role Of Technological Change
Implications of technological change for the
globalization of markets include:
low cost global communications networks help create
electronic global marketplace
low-cost transportation help create global markets
global communication networks and global media are creating a worldwide culture, and a global market for consumer products
Слайд 18The Changing Demographics
Of The Global Economy
There has been
a drastic change in the demographics of the world economy
in the last 30 years
Four trends are important:
the Changing World Output and World Trade Picture
the Changing Foreign Direct Investment Picture
the Changing Nature of the Multinational Enterprise
the Changing World Order
Слайд 19The Changing World Output
And World Trade Picture
In 1960, the
United States accounted for over 40% of world economic activity
By
2006, the United States accounted for less than 20% of world economic activity
A similar trend occurred in other developed countries
The share of world output accounted for by developing nations is rising and is expected to account for more than 60% of world economic activity by 2020
Слайд 20The Changing World Output
And World Trade Picture
Table 1.2: The
Changing Demographics of World GDP and Trade
Слайд 21The Changing Foreign Direct
Investment Picture
In the 1960s, U.S. firms
accounted for about two-thirds of worldwide FDI flows
Today, the United
States accounts for less than one-fifth of worldwide FDI flows
Other developed countries have followed a similar pattern
In contrast, the share of FDI accounted for by developing countries has risen from less than 2% in 1980 to almost 12% in 2005
Developing countries, especially China, have also become popular destinations for FDI
Слайд 22The Changing Foreign Direct
Investment Picture
Figure 1.2: Percentage Share of
Total FDI Stock 1980-2005
Слайд 23The Changing Foreign Direct
Investment Picture
Figure 1.3: FDI Inflows 1988-2006
Слайд 24The Changing Nature Of
The Multinational Enterprise
A multinational enterprise (MNE)
is any business that has productive activities in two or
more countries
Since the 1960s, there has been a rise in non-U.S. multinationals, and a growth of mini-multinationals
Слайд 25The Changing World Order
Many former Communist nations in Europe and
Asia are now committed to democratic politics and free market
economies and so, create new opportunities for international businesses
China and Latin America are also moving toward greater free market reforms
Слайд 26The Global Economy Of
The Twenty-first Century
The world is
moving toward a more global economic system, but globalization is
not inevitable
Globalization also brings risks like the financial crisis that swept through South East Asia in the late 1990s
Слайд 27The Globalization Debate
Is the shift toward a more integrated
and interdependent global economy a good thing?
Supporters believe that increased
trade and cross-border investment mean lower prices for goods and services, greater economic growth, higher consumer income, and more jobs
Critics worry that globalization will cause job losses, environmental degradation, and the cultural imperialism of global media and MNEs
Слайд 28Anti-Globalization Protests
More than 40,000 anti-globalization protesters took to the street
at the WTO meeting in Seattle in 1999
Protesters now regularly
show up at most major meetings of global institutions
Слайд 29Globalization, Jobs, And Income
Globalization critics argue that falling barriers
to trade are destroying manufacturing jobs in advanced countries
Supporters of
globalization contend that the benefits of this trend outweigh the costs—that countries will specialize in what they do most efficiently and trade for other goods—and all countries will benefit
Слайд 30Globalization, Labor Policies,
And The Environment
Globalization critics argue that firms
avoid costly efforts to adhere to labor and environmental regulations
by moving production to countries where such regulations do not exist, or are not enforced
Globalization supporters claim that tougher environmental and labor standards are associated with economic progress, so as countries get richer from free trade, they get tougher environmental and labor regulations
Слайд 31Globalization And
National Sovereignty
Critics of globalization worry that today’s
interdependent global economy is shifting economic power away from national
governments toward supranational organizations like the WTO, the EU, and the UN
Supporters of globalization contend that the power of these organizations is limited to what nation-states agree to grant, and that the power of the organizations lies in their ability to get countries to agree to follow certain actions
Слайд 32Globalization And The World’s Poor
Critics of globalization argue that
the gap between rich nations and poor nations is getting
wider
Supporters of globalization claim that the best way for the poor nations to improve their situation is to reduce barriers to trade and investment and implement economic policies based on free market economies, and to receive debt forgiveness for debts incurred under totalitarian regimes
Слайд 33Managing In The Global Marketplace
An international business is any
firm that engages in international trade or investment
Слайд 34Managing In The Global Marketplace
Managing an international business differs
from managing a domestic business because:
countries 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
