MGT 340 Chapter 1 Globalization

emerging internationalism

Developing and emerging countries play more dominant roles in the global economic system

FDI

Foreign direct investment, investment in property, plant, or equipment in another country.

Proponents argue

If countries are held accountable on a global scale in an integrated community, they will have better infrastructure, greater education, etc...

Internationalization vs. Globalization

Internationalization is the process of a business crossing national and cultural borders, globalization is the vision of creating one world unit, a single market entity.

MISt Countries

Mexico, Indonesia, South korea, and turkey N-11, growing future potential

MNC

Multinational corporation, a firm that has operations in more than one country, international sales, and a mix of nationalities among managers and owners. Some earn more annual revenue in international then USA. Companies from developing economies are competition. Companies now moving headquarters overseas

Benefits of globalization

Proponents believe that everyone benefits from globalization, as evidenced in lower prices, greater availability of goods, better jobs, and access to technology. Theoretically, individuals in established markets will strive for better education and training to be prepared for future positions, while citizens in emerging markets and underdeveloped countries will reap the benefits of large amounts of capital flowing into those countries which will stimulate growth and development.

Introduction

Social networks have rapidly diffused from the United States and Europe to every region of the world, underscoring the inexorable nature of globalization. As individuals who share interests and preferences link up, they are afforded opportunities to connect in ways that were unimaginable just a decade ago. These networks are revolutionizing the nature of management—including international management—by allowing producers and consumers to interact directly without the usual intermediaries. Networks and the individuals who make them up are bringing populations of the world closer together and further accelerating the already rapid pace of globalization and integration. globalization is moving at a rapid pace and that all nations, including the United States, as well as individual companies and their managers, are going to have to keep a close watch on the current environment if they hope to be competitive in the years ahead.

North American Free Trade Agreement (NAFTA)

The United states, Canada, and Mexico, removed all barriers to trade among these countries and create a huge North American Market. (1) the elimination of tariffs as well as import and export quotas; (2) the opening of government procurement markets to companies in the other two nations; (3) an increase in the opportunity to make investments in each other's country; (4) an increase in the ease of travel between countries; and (5) the removal of restrictions on agricultural products, auto parts, and energy goods.

Management

completing activities with and through other people

World Trade Organization WTO

The global organization countries that oversees rules and regulations for international trade and investment Conduct of trade around te world, momentum of trade agreemtns has slowed. Failure to reach agreement, stalled.

Globalization

The process of social, political, economic, cultural, and technological integration among countries around the world. Not internationalization More trade, capital flows, migration, facilitated by technology. Offshoring and outsourcing increases global linkages. MNC's show inclusion of different regions of the world because of bglobalization

Outsourcing

The subcontracting or contracting out of activities to external organizations that had previously been performed by the firm.

European Union (EU)

a political and economic community consisted of 28 member states, progress, trade barriers removed, unified currency called euro, compare prices, can achieve scale to reduce costs and increase efficiencies.

Worries about globalization

about rising inequities between incomes, and nongovernmental organizations (NGOs) have become more active in expressing concerns about the potential shortcomings of economic globalization. the high number of jobs moving abroad as a result of the offshoring of business services jobs to lower-wage countries does not inherently create greater opportunities at home and that the main winners of globalization are the company executives. "Race to the bottom" who can get the cheapest labor.

GDP of the developing world are ...

beginning to show signs of a slowdown

Firms must

develop international management expertise relevant to the increasingly important developing and emerging markets of the world. Learn to work effectively with those from many different countries.

African countries

have not benefited from globalization

Antiglobalization

if corporations are free to locate anywhere in the world, the world's poorest will lower standards in order to bring them in.

NAFTA and CAFTA

reduce barrier to trade, require reforms to protect property rights. Upgrade working conditions and environmental protections, new opportunities to bolster trade.

How international management is different from other management styles

need to know about global issues and specific cultures for success.

International Management

process of applying management concepts, techniques in a multinational environment and adapting management practices to different economic, political, and cultural contexts.

BRIC econoies

share of world growth estimated to more than 40 percent in 2025, rising tremendously Brazil Russia India China

Offshoring

the process by which companies undertake some activities at offshore locations instead of in their countries of origin