Gbe PPT

Day 1
Globalization
12 - 2
What 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
McGraw-Hill/Irwin
International Business, 6/e © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
12 - 3
The 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
McGraw-Hill/Irwin
12 - 4
The 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
McGraw-Hill/Irwin
12 - 5
Classroom Performance System
The shift toward a more integrated and interdependent

world economy is referred to as
a) economic integration
b) economic interdependency
c) globalization
d) internationalization
McGraw-Hill/Irwin
12 - 6
The 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
McGraw-Hill/Irwin
12 - 7
The merging of historically distinct and separate national

markets into one huge global marketplace is known as
a) global market facilitation

b) cross-border trade
c) supranational market integration
d) the globalization of markets
McGraw-Hill/Irwin
12 - 8
Firms that are involved in international business tend to be
a) large
b) small
c) medium-sized
d) large, small, and medium-sized
McGraw-Hill/Irwin
12 - 9
The 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
McGraw-Hill/Irwin
12 - 10
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)
McGraw-Hill/Irwin
12 - 11
•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
McGraw-Hill/Irwin
12 - 12
•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
McGraw-Hill/Irwin
12 - 13
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
McGraw-Hill/Irwin
12 - 14
Which is not a factor of production?
a) trade
b) land
c) capital
d) energy
McGraw-Hill/Irwin
12 - 15
Drivers 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
McGraw-Hill/Irwin
12 - 16
Declining 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
McGraw-Hill/Irwin
12 - 17
The sourcing of good and services from around the world to take
advantage of national differences in the cost and quality of
factors of production is called
a) economies of scale
b) the globalization of production
c) global integration
d) global sourcing
McGraw-Hill/Irwin
12 - 18
Declining Trade And

Investment Barriers
Table 1.1: Average Tariff Rates on Manufactured Products as
Percent of Value
McGraw-Hill/Irwin
12 - 19
Declining 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
McGraw-Hill/Irwin
12 - 20
Which organization is responsible for policing the world trading

system?
a) the International Monetary Fund

b) the United Nations
c) the World Trade Organization
d) the World Bank
McGraw-Hill/Irwin
12 - 21
The 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
McGraw-Hill/Irwin
12 - 22
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
McGraw-Hill/Irwin
12 - 23
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
McGraw-Hill/Irwin
12 - 24
The 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
McGraw-Hill/Irwin
12 - 25
The 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
McGraw-Hill/Irwin
12 - 26
The Changing World Output

And World Trade Picture
Table 1.2: The Changing Demographics of World GDP and
Trade
McGraw-Hill/Irwin
12 - 27
The 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
McGraw-Hill/Irwin
12 - 28

Investment Picture
Figure 1.2: Percentage Share of Total FDI Stock 1980-2005
McGraw-Hill/Irwin
12 - 29

Investment Picture
Figure 1.3: FDI Inflows 1988-2006
McGraw-Hill/Irwin
12 - 30
What is the single most important innovation to the globalization

of markets and production?
a) advances in transportation technology

b) the development of the microprocessor
c) advances in communication
d) the Internet
McGraw-Hill/Irwin
12 - 31
The 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
McGraw-Hill/Irwin
12 - 32
The 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
McGraw-Hill/Irwin
12 - 33
The 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
McGraw-Hill/Irwin
12 - 34
Which of the following trends is true?
a) the United States is accounting for a greater percentage of

world trade than ever before
b) the United States is accounting for a greater percentage of
foreign direct investment than ever before
c) the share of world trade accounted for by developing countries
is rising
d) the share of foreign direct investment by developing countries
is declining
McGraw-Hill/Irwin
12 - 35
The 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
McGraw-Hill/Irwin
12 - 36
Anti-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
McGraw-Hill/Irwin
12 - 37
Globalization, 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
McGraw-Hill/Irwin
12 - 38
Globalization, 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
McGraw-Hill/Irwin
12 - 39
Globalization 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
McGraw-Hill/Irwin
12 - 40
Globalization 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
McGraw-Hill/Irwin
12 - 41
Which of these is not a concern of anti-globalization protesters?
a) globalization raises consumer income

b) globalization contributes to environmental degradation
c) globalization is causing a loss of manufacturing jobs in
developing countries
d) globalization implies a loss of national sovereignty
McGraw-Hill/Irwin
12 - 42
Managing In The Global Marketplace
•An international business is any firm that engages in

international trade or investment
McGraw-Hill/Irwin
12 - 43
Managing 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
McGraw-Hill/Irwin
Day 2
The Strategy of
International Business
12 - 45
What Makes Firms Different?
• Apple Computers vs. Dell

• BMW vs. Toyota
• Yum! vs. McDonald’s
McGraw-Hill/Irwin
12 - 46
Strategy and the Firm
• Strategy can be defined as the actions that managers

must take to attain the goals of the firm
- For most firms, the preeminent goal is to maximize the
value of the firm for its owners
• Profitability can be defined as the rate of return that
the firm makes on its invested capital (ROIC), which
is calculated by dividing the net profits of the firm by
total invested capital
• Profit growth is measured by the percentage increase
in net profits over time
McGraw-Hill/Irwin
12 - 47
Strategy and the Firm
McGraw-Hill/Irwin
12 - 48
Value Creation
• The way to increase the profitability of a firm is to create more

value
- The amount of value a firm creates is measured by the difference
between its costs of production and the value that consumers
perceive in its products
• Michael Porter states that there are two basic strategies for
creating value and attaining a competitive advantage in an
industry
- Low-cost strategy suggests that a firm has high profits when it
creates more value for its customers and does so at a lower cost
- Differentiation strategy focuses primarily on increasing the
attractiveness of a product
McGraw-Hill/Irwin
12 - 49
Value Creation
McGraw-Hill/Irwin
12 - 50
Strategic Positioning
• It is important for a firm to be explicit about its choice of

strategic emphasis with regard to value creation
- Management must decide where the company wants to be
positioned with regard to value and cost
• A central tenet of the basic strategy paradigm is: To maximize
its profitability, a firm must do three things
- Pick a position on the efficiency frontier that is viable in the sense
that there is enough demand to support that choice
- Configure internal operations so that they support that position
- Make sure that the firm has the right organization structure in
place to execute its strategy
McGraw-Hill/Irwin
12 - 51
Strategic Choice in the

International Hotel Industry
McGraw-Hill/Irwin
12 - 52
The Value Chain
• Any firm is composed of a series of distinct value

creating activities
- Primary activities
• Research & development
• Production
• Marketing & sales
• Service
- Support Activities
• Materials management or logistics
• Human resource
• Information systems
• Company infrastructure
McGraw-Hill/Irwin
12 - 53
Global Expansion, Profitability,

and Profit Growth
• Expanding globally allows firms to increase their profitability

and rate of profit growth in ways not available to purely
domestic enterprises
• Firms that operate internationally are able to
- Expand the market for their domestic products
- Realize location economies by dispersing individual value
creation activities
- Realize greater cost economies
- Earn a greater return by leveraging any valuable skills developed
in foreign operations
McGraw-Hill/Irwin
12 - 54
EXPANDING THE MARKET:

LEVERAGING PRODUCT
AND COMPETENCIES
• A company can increase its growth rate by taking goods or

services developed at home and selling them internationally
- Returns from such a strategy are likely to be greater if indigenous
competitors in the nations a company enters lack comparable
products
• Success of multinational companies also rest upon the core
competencies that underlie the development, production, and
marketing of goods or services
- Core competencies are skills within the firm that competitors
cannot easily match or imitate
- Core competencies are the bedrock of a firm’s competitive
advantage and enable them to reduce the costs of value creation
McGraw-Hill/Irwin
12 - 55
Location Economies
• Location economies are the economies that arise from

performing a value creation activity in the optimal location for
that activity
• Can have one of two effects
- It can lower the costs of value creation and help the firm to
achieve a low-cost position and/or
- It can enable a firm to differentiate its product offering from those
of competitors
• One result of this kind of thinking is the creation of a global
web of value creation activities, with different stages of the
value chain being dispersed to those locations around the globe
where perceived value is maximized or where the costs of value
creation are minimized
McGraw-Hill/Irwin
12 - 56
Experience Effects
• The experience curve refers to systematic reductions in

production costs that have been observed to occur over the life
of a product
• There are two explanations for the experience effect
- Learning effects refer to cost savings that come from learning by
doing
- Economies of scale refer to the reductions in unit cost achieved
by producing a large volume of a product
• The strategic significance of the experience curve is clear;
moving down the experience curve allows a firm to reduce its
cost of creating value and increase its profitability
McGraw-Hill/Irwin
12 - 57
Leveraging Subsidiary Skills
• Leveraging the skills created within subsidiaries and applying

them to other operations within the firm’s global network may
create value
• Learning how to leverage the skills of subsidiaries presents a
challenge for managers of multinational organizations
- They must have the humility to recognize that valuable skills
leading to competencies can arise anywhere within the firm’s
global network
- They must establish an incentive system that encourages local
employees to acquire new skills
- They must have a process for identifying when valuable new
skills have been created in a subsidiary
- They need to act as facilitators, helping to transfer valuable skills
within the firm
McGraw-Hill/Irwin
12 - 58
Cost Pressures and Pressures for

Local Responsiveness
• Firms that compete in the

global marketplace
typically face two types
of competitive pressure
- Pressures for cost
reductions
- Pressures to be locally
responsive
McGraw-Hill/Irwin
12 - 59
Pressures for Cost Reductions
• International businesses often face pressures for cost reductions

because of the competitive global market
• Pressures for cost reduction can be particularly intense in
industries producing commodity-type products
- Universal needs exist when the tastes and preferences of
consumers in different nations are similar if not identical
• Pressures for cost reductions are also intense
- In industries where major competitors are based in low-cost
locations
- Where there is persistent excess capacity
- Where consumers are powerful and face low switching costs
McGraw-Hill/Irwin
12 - 60
Pressures for Local

Responsiveness
• Differences in consumer tastes & preferences

- North American families like pickup trucks while in Europe they
are viewed as a utility vehicle for firms
• Differences in infrastructure & traditional practices
- Consumer electrical system in North America is based on 110
volts; in Europe on 240 volts
• Differences in distribution channels
- Germany has few retailers dominating the food market, while in
Italy it is fragmented
• Host-Government demands
- Health care system differences between countries require
pharmaceutical firms to change operating procedures
McGraw-Hill/Irwin
12 - 61
Choosing a Strategy
McGraw-Hill/Irwin
12 - 62
International Strategy
• Create value by transferring valuable core

competencies to foreign markets that indigenous
competitors lack
• Centralize product development functions at home
• Establish manufacturing and marketing functions in
local country but head office exercises tight control
over it
• Limit customization of product offering and market
strategy
- Strategy effective if firm faces weak pressures for
local responsive and cost reductions
McGraw-Hill/Irwin
12 - 63
Global Standardization Strategy
• Focus is on achieving a low cost strategy by reaping

cost reductions that come from experience curve
effects and location economies
• Production, marketing, and R&D concentrated in few
favorable functions
• Market standardized product to keep costs low
• Effective where strong pressures for cost reductions
and low demand for local responsiveness exist
- Semiconductor industry
McGraw-Hill/Irwin
12 - 64
Localization Strategy
• Main aim is maximum local responsiveness

• Customize product offering, market strategy including
production and R&D according to national conditions
• Generally unable to realize value from experience
curve effects and location economies
• Possess high cost structure
McGraw-Hill/Irwin
12 - 65
Transnational Strategy
• To meet competition, firms aim to reduce costs,

transfer core competencies while paying attention to
pressures for local responsiveness
• Global learning
- Valuable skills can develop in any of the firm’s world
wide operations
- Transfer of knowledge from foreign subsidiary to
home country, to other foreign subsidiaries
• Transnational strategy can be a difficult task due to
contradictory demands placed on the organization
- Caterpillar
McGraw-Hill/Irwin
Chapter Four
Multinationals and the

Global Environment of
Business
McGraw-Hill/Irwin
Introduction to Business © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved.
12 - 68
Chapter 4
Global Environment of Business
1. Describe the role of multinational companies in global production and

trade today and the way they affect the countries in which they operate.
2. Discuss how multinationals are affected by the political systems of the
countries they operate in and especially by the desire of countries around
the world to pursue free trade and reduce or abolish tariff barriers.
3. Describe the nature of the specific forces in the global environment and
appreciate why they present so many challenges for multinational
companies today.
4. Describe the nature of the general forces in the global environment that
affect all companies as they compete in industries or countries around the
world.
5. Identify the main challenges facing multinationals in managing global
business commerce and business occupations, and choosing a method of
global organizing.
McGraw-Hill/Irwin
12 - 69
Chapter 4
Multinational companies
• Are operating in a global environment and conditions
such as opportunities and threats that affect the
multinational company’s profitability
McGraw-Hill/Irwin
12 - 70
Chapter 4
• Review SWOT analysis in Chapter 3

• Evaluate SWOT analysis from a personal perspective
• The giant multinationals can dominate business

activity in most industries
McGraw-Hill/Irwin
12 - 71
Chapter 4
Significance of Multinationals
• In business commerce, multinationals control the giant
production and distribution of products that handle the
majority of world trade
McGraw-Hill/Irwin
12 - 72
Chapter 4
 Production is worldwide and tends to countries where
labor costs are low and therefore higher productivity
McGraw-Hill/Irwin
12 - 73
Chapter 4
 Multinationals have grown so large they can affect the
well being of the countries they do business in as the
role of the government may be to control the
relationship of this company and the people
McGraw-Hill/Irwin
12 - 74
Chapter 4
 Company and individual behavior are affected by a
country’s choice of property rights and is a main
determinant of its political system
McGraw-Hill/Irwin
12 - 75
Chapter 4
Capitalism
 Capitalism as a business system (private ownership of
the means of production and distribution) – is most
commonly found in representative democracies and
may be illustrated as a continuum or a range
 Evaluate Be Your Own Boss video and relate to

capitalism and the global environment of business
McGraw-Hill/Irwin
12 - 76
Chapter 4
Capitalism
 At your left is “strong” capitalism where individuals
are ultimately responsible for their own future success
– “strong” property rights
McGraw-Hill/Irwin
12 - 77
Chapter 4
Capitalism
 At you move right capitalism becomes “weaker” as
the government and/or welfare capitalism establishes a
social support framework to aid citizens who don’t
support themselves
McGraw-Hill/Irwin
12 - 78
Chapter 4
Capitalism
 Capitalism varies as to the amount of a government
social support by country
 Canada is a “stronger” capitalist country compared to

Sweden
McGraw-Hill/Irwin
12 - 79
Chapter 4
Totalitarian government
 One person, usually a dictator, or party exercises
absolute control over all business and social activity
 Evaluate Capitalism and

relate its key elements to
Socialism and Communism
McGraw-Hill/Irwin
12 - 80
Chapter 4
Communism
 Not only totalitarian but all property is owned by the
state (no property rights) or government and
distribution is totally controlled by the state
McGraw-Hill/Irwin
12 - 81
Chapter 4
Communism
 Controls the creation of wealth as there isn’t any
motivation to produce more product
McGraw-Hill/Irwin
12 - 82
Chapter 4
Free trade agreements

 Established by countries to reduce or eliminate price barriers to
and are designed to increase the flow of products among
countries
 Evaluate China Brands video and relate to capitalism and the

global environment of business
McGraw-Hill/Irwin
12 - 83
Chapter 4
Tariffs
 Taxes on imported products that raises the price and
may make them uncompetitive with the local product
McGraw-Hill/Irwin
12 - 84
Chapter 4
Free Trade Zones

 The establishment of free trade areas creates an
opportunity for global manufacturing companies as it
minimizes the cost and barriers to trade
McGraw-Hill/Irwin
12 - 85
Chapter 4
Free Trade Zones

 Free trade areas increase competition and some
multinationals consider this a threat rather than an
opportunity
 Evaluate an FTZ and relate to the global environment
of business
McGraw-Hill/Irwin
12 - 86
Chapter 4
Global Environment
 You may want to think of the global environment as a
worldwide marketplace and as the set of forces
surrounding you that determine the ability to obtain
productive resources of land, labor, capital, and
enterprise
McGraw-Hill/Irwin
12 - 87
Chapter 4
Global Environment
 Every product goes through three stages:
 Input
 Conversion
 Output
 In the process of making and selling of goods and
services
 Evaluate the Peace Corps video and relate to the
global environment of business
McGraw-Hill/Irwin
12 - 88
Chapter 4
Forces in the Global Environment

 The specific forces directly affect the company’s
business model while general forces affect all
multinationals
 Specific forces are directly related to profitability and
are suppliers, distributors, competitors, and customers
McGraw-Hill/Irwin
12 - 89
Chapter 4

 Customers and competitors are also specific forces and
both affect the company’s market share or that portion
of a product sold in a market by one company
McGraw-Hill/Irwin
12 - 90
Chapter 4

 General forces in the global environment affect
multinationals access to resources and determine
worldwide demand and include, economic, socio-
cultural, demographic, and legal forces
 Evaluate the PWE and productivity of Mexican
brewery workers in a multicultural organization
McGraw-Hill/Irwin
12 - 91
Chapter 4

 These forces are general because they affect all
multinationals and their suppliers, distributors and
customers
McGraw-Hill/Irwin
12 - 92
Chapter 4
Global outsourcing
 Of suppliers is not only a very controversial issue as it
is the process by which companies purchase supplies,
labor or raw materials throughout the world
McGraw-Hill/Irwin
12 - 93
Chapter 4
Global outsourcing
 An intermediary such as a agent, broker, or
wholesaler is a company that distributes or supplies a
product to another company
McGraw-Hill/Irwin
12 - 94
Chapter 4
Challenges of global commerce

 Building a global competitive advantage, integration
of the Internet into the business models
McGraw-Hill/Irwin
12 - 95
Chapter 4
Challenges of global commerce

 Managing ethically
 Incorporating the differing cultures into global
planning and organizing
 Evaluate a multinational organization of your choice and
describe their global environment
McGraw-Hill/Irwin
12 - 96
Chapter 4
Globalization
 Has led to the development of a diverse supply of IT
workers in both Europe and Asia as these workers are
linked through the Internet as a part of the global
workforce
McGraw-Hill/Irwin

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Day 1

•The world is moving away from self-contained

Globalization has two facets:

The Globalization Of Markets

•The globalization of markets refers to the merging of historically

The Globalization Of Markets

•Falling trade barriers make it easier to sell internationally

Classroom Performance System

The shift toward a more integrated and interdependent

The Globalization Of Production

•The globalization of production refers to the sourcing of goods

•Companies compete more effectively by lowering their overall

Classroom Performance System

The merging of historically distinct and separate national

a) global market facilitation

Classroom Performance System

Firms that are involved in international business tend to be

The Emergence Of Global Institutions

Institutions are needed to:

The Emergence Of Global Institutions

Institutions created over the past half century include:

The Emergence Of Global Institutions

•The World Trade Organization (like its predecessor GATT) is

The Emergence Of Global Institutions

•The International Monetary Fund and the World Bank were

The Emergence Of Global Institutions

The United Nations was established in 1945 to:

Classroom Performance System

Which is not a factor of production?

Two macro factors underlie the trend toward greater

Declining Trade And

Classroom Performance System

Declining Trade And

Declining Trade And

Classroom Performance System

Which organization is responsible for policing the world trading

a) the International Monetary Fund

The Role Of Technological Change

•Technological change has made the globalization of markets a

Important advances have occurred in:

The Role Of Technological Change

Implications of technological change for the globalization of

The Role Of Technological Change

Implications of technological change for the globalization of

The Changing Demographics

Four trends are important:

The Changing World Output

The Changing World Output

The Changing Foreign Direct

The Changing Foreign Direct

The Changing Foreign Direct

Classroom Performance System

What is the single most important innovation to the globalization

a) advances in transportation technology

The Changing Nature Of

The Changing World Order

•Many former Communist nations in Europe and Asia are now

The Global Economy Of

Classroom Performance System

Which of the following trends is true?

a) the United States is accounting for a greater percentage of

The Globalization Debate

Is the shift toward a more integrated and interdependent global