IBUS 301 Hudgens Midterm Review

What is the primary difference in Friedman's Globalization 2.0 and Globalization 3.0?

- 2.0 - driven by MNC who shrunk the world with many breakthroughs in hardware/industry - 3.0 - gives individuals, as producers and consumers, the power to globally collaborate The primary difference involves that Globalization 2.0 was driven by multinational companies who shrunk the world with many breakthroughs in hardware and industry. Globalization 3.0 is different because it gives individuals the power to globally collaborate as producers and consumers.

Discuss the significance of the TPP as a regional trade agreement. Name at least three of the participating countries. Why, in your opinion, did the US not participate?

- A regional trade agreement is an intergovernmental agreement that reduces or eliminates the barriers of trade. - An example of a regional trade agreement is The Trans-Pacific Partnership, which allowed for easier trade between 12 different nations. - Three of the countries are Japan, Canada, Mexico - US did not participate because of concerns that the agreement would hurt American workers and undercut US companies. The cheap labor in some of these rival countries is causing the US worker to lose out

In our discussion of the WTO why did the US seek to ban shrimp from certain countries?

- Certain countries failed to meet requirements put in place to protect sea turtles - This lead to these countries taking the dispute to WTO which ruled against US b/c of discrimination

Briefly describe the CNOOC case in terms of the State's Goal Dilemma.

- Chinese government-backed oil firm tried to acquire US oil firm - Brought up issue of national security and if consumer interest was more important - Issue of State-owned firms in foreign investment and if free trade is more important than national security concerns

Discuss the main dimensions of distance in Ghemawat's CAGE by defining each of the four. Provide a basic example for two of these four.

- Cultural Distance - different languages, ethnicities, religions, values, norms (Ex: middle east - conflicting religion and values lead to distance between cultures) - Administrative Distance - differences in corruption, legal rules, political risk and instability, colonial ties, government policies (Ex: Latin American countries have deep corruption that causes distance between other administrations) - Geographical Distance - physical remoteness, lack of common border, lack of sea/river access, size of country, weak transportation/communication links, climates - Economic Distance - differences in consumer incomes, costs, and human and natural resources

Write the four dimensions of CAGE (from Ghemawat)

- Cultural, Administrative, Geographical, Economic

What is the WTO's DSB?

- Dispute Settlement Body - includes all reps of WTO member governments - decides outcome of trade dispute on recommendation of Dispute Panel

What is the difference between distributive fairness and procedural fairness?

- Distributive - how fair the allocation of funds are - Procedural - the fairness of the procedures by which resource allocation is made

Provide in three sentences a summary of the GMO Hormone Beef issue in the WTO.

- EU banned beef with hormones b/c found to cause health problems - several countries cited there was no evidence (WTO upheld this) - EU appealed and lost, but instead of abiding by the decision, paid a tariff of $120 million

What are the three different norms of distributive fairness

- Equality Rule (equal shares for all) - Needs Based Rule (benefits proportional to needs) - Equity Rule (distribution should match contribution)

What is GATT as a predecessor to WTO?

- General Agreement for Tariffs & Trade - would adjudicate governments thought to be violating GATT (but needed unanimous vote even from accused party) - This was strengthened by the creation of the WTO

What is Friedman's "Triple Convergence"?

- Market Liberalization - Brazil, Russia, India, China - New Technologies - Global network allows easy connection among widespread people - Revolutionary Structures & Strategies - new organizations develop to take advantage of the interconnected world Friedman's Triple Convergence includes three different factors of today's world. They are Market Liberalization (B.R.I.C.), New Technologies (interconnectedness of world wide web), and Revolutionary Structures and Strategies (companies taking advantage of new world landscape).

Provide two examples of the Value Dilemma.

- Nike - Legally employ low cost, underage workers in Indonesian factories - Bangladesh - has lowest minimum wages so companies attracted to manufacturing there, which has lead to rising industries in the country as well as dangerous working conditions

Write the dimensions developed by Hofstede

- Power Distance - Uncertainty Avoidance - Individualism - Masculinity vs. Femininity

Name three instruments of national trade policy.

- Tariffs - Subsidy - Import Quota

The National Security Dilemma: CNOOC and Unocal Debate: Should the US government prohibit Chinese companies from buying US oil companies like Unocal? Positions: 1) Economic and political advisors to the Bush government; 2) Unocal's board of director; 3) Chevron and its lobbyists; 4) free-trade economists; 5) China National Offshore Oil Corporation (CNOOC); 6) Chinese government; 7) US Department of Defense.

- The US should not prohibit Chinese companies from buying US oil companies. - With business today being more globalized than ever before, governments should not have the right to prohibit what business transactions are done with multinational companies. - This would cause a domino effect and lead to governments preventing the flow of business because of internal agendas. - The prevention directly contradicts the notion of free trade and allowing companies to have the freedom to choose the best possible option. - With that being said, in situations like these the companies and transactions should be monitored more closely and possibly even have to go through additional security measures.

Regional Governance: The Trans-Pacific Partnership (TPP) Debate: Public televised debate on whether the United States should continue to negotiate trade deals like the TPP, and, if yes, what should, and what should not, be included within them. Positions: 1) US government representatives; 2) Chinese government representatives; 3) Vietnamese government representatives; 4) Canadian government representative; 4) US Union representatives; 5) Representative of Elizabeth Warren's office (see reading); 6)US Chamber of Commerce representative; 7) Free-trade economists

- US should not negotiate trade deals such as the TPP. This is because deals like the TPP can fundamentally hurt the US, its workers, and its companies when other countries are able to attract more business from employing a lower cost of labor. - The notion of free trade is questioned when certain countries have regional trade agreement restrictions/limitations in place while others are able to act consideration. - Trade deals like the TPP are not nearly as significant when measures laid out by the agreement are opposed or contradicted by other countries. - If the US's able to compromise with these countries in a regional trade agreement like the TPP, this would be more beneficial.

Following Huntington's Clash of Civilizations (1993) name the different civilizations.

- Western, Confucian, Japanese, Islamic, Hindu, Slavic-Orthodox, Latin America, African

What is a "transnational mindset"?

- ability to develop, interpret, and implement criteria for personal and business performance that are independent from assumptions of a single country, culture, or context A transnational mindset is the ability to develop, interpret, and implement criteria for personal and business performance. More so, that are independent from assumptions of a single country, culture, or context.

What is the "Race to the Bottom" and cite an illustration used in class/reading.

- companies racing to obtain lowest cost of labor possible for manufacturing - Ex: Nike employing child workers in Indonesia where it is legal for lowest legal cost

Define in one sentence Ghemawat's Administrative Distance

- differences in corruption, legal rules, political risk & instability, government policies, colonial ties

What is the main issue in the debate on H1-B visas?

- how to determine who receives the visas when there is only a limited supply to offer - also, issue is competition among skilled foreign workers and the domestic workforce

Name two advantages globalization

- lower consumer costs - global competition leads to better product/service quality One advantage of globalization is that it helps lower consumer costs. Another advantage is that globalization promotes global competition and this leads to better quality products/services.

Name two forces of localization

- nationalism - security concerns One force of localization can be the effect of nationalism and how people value their own country over others. Another force can be security concerns as this can cause tension between varying countries and cultures.

Name two consequences (potential) in the backlash against globalization?

- protectionism - trade wars One potential consequence in the globalization backlash is protectionism and the idea that a country trying to protect national-interests by cutting off its borders to foreigners, will in doing so harm/restrict the country. Another consequence is potential trade wars and the idea that a trade dispute/conflict can lead to increased adversity in other areas than trade.

In Davis and Hilsenrath (2017), with a reversal in globalization (with a decline in cross- border trade), what potentially lifts wages for unskilled workers in wealthy countries?

- reducing competition from low wage nations --> low wage nations won't be the obvious choice for companies and they can look for other workers in more developed/wealthy countries One scenario that could fit was for these unskilled workers in wealthy countries is ...

What is a regional trade block and give an example

- regional trade block - type of intergovernmental agreement where regional barriers to trade are reduced/eliminated - Ex: EU, NAFTA

For Palmisano, what is the most important challenge for the globally integrated enterprise?

- securing a supply of high value skills The most important challenge is the ability to secure a supply of high value skills that are sustainable in todays world. Nations and companies alike must invest in better education and training programs to gain a competitive edge.

What is the Distributional Dilemma?

- stems from the fact that no trade policy benefits everyone - instead, some are helped while others are harmed - this affected distribution of wealth, income, and power in the process - Most visible effects are usually sectoral protecting or promoting one party at expense of another

In Davis and Hilsenrath (2017), critics of globalization say a slowdown in cross-border trade and finance will help in three ways. Name at least two

- will ease pressure on wages of unskilled workers in developed nations - will reduce influence multinational companies have in developing nations One way a slowdown can help is by easing pressure on ...

Provide three of the six reasons that Huntington states can cause conflict among civilizations.

- world is becoming smaller place - differences among civilizations are too basic - people are separated from longstanding local identities, religion filling the gap One reason is ...

What is Ghemawat's "semi-globalization'?

Ghemawat's semi-globalization is the reality of the world's conditions in which neither the barrier, nor the connections among different markets, can be neglected. Also, this refers to the tension and uncertainty between the forces of globalization and localization, taking place at the same time.

Nike and Labor: In terms of your reading and our discussion of the Nike Case and the events of the Bangladesh factory collapse, if prompted, how might you account for the following viewpoints (similar to the way we thought about the Nike Case and the respective stakeholders' viewpoints)? Debate: Televised discussion over Nike's activities in Indonesia. The debate involves whether: a) Nike's behavior should be regulated; and b) who should achieve that regulation. Should the Indonesian government regulate that behavior? Should the US government? Should an International agency regulate? If so, what type of agency? Positions: 1) Nike; 2) Nike's regional subcontractors; 3) a group of Indonesian workers; 4) representatives of Indonesian government; 5) representatives of US government; 6) Asian- American Free Labor Association (AAFLI); 7) agents of Michael Jordan and Tiger Woods.

Nike's underage labor activities in Indonesia is an important topic in today's world. - Nike's behavior should definitely be regulated as multinational companies who manufacture in developing countries tend to have a lot of influence. - The regulation should come from a collaboration of parties. Specifically, the US and Indonesian government because while the practices are abroad, Nike is an American company and the US should contribute to keeping them in check. - Also, the regulation can come from an international agency that specializes in labor. One of which could be the International Labor Organization.

Using Ghemawat's article "Distance Still Matters" provide a summary applying the CAGE model to of the US media firm Star TV.

Star TV tried to deliver TV programming to Asia, but failed - Cultural - wrongly assumed that Asian viewers wanted English-langauge programming - Administrative - different legal rules and governmental policies conflicted with the programming - Geographic - The size issue of Asia was thought to be solved by satellites - Economic - Star TV targeted the top 5% of the social economic pyramid

The Distributional Dilemma: The H-1B Visa Debate Debate: Televised debate on the future of the H-1B Visa in the United States. What should its future be? How many should be given out, if any at all? What type of criteria should be used? Who should regulate and control who is awarded? Positions: 1) laid-off US workers; 2) leaders of US high-tech companies; 3) present recipients of H-1B visas living in the US; 4) US Union representatives; 5) Free-trade economists; 6) Washington Alliance of Technology Workers (see readings); 7) Representatives of Trump Administration.

The topic of H-1B visas is very important and controversial in today's world. In the future, the program should be restructured to improve security and give out less visas. - The number should be reduced or limited because national security concerns are becoming more and more apparent within the US. - The criteria should include much of the usual measures including background checks, family ties, and so on. However, the criteria must me be adapted to today's world such as including internet search history. - In addition, as world population increases, the US needs to take more of a nationalistic approach in order to protect its citizens first and foremost. This is already taking place all over the world, in countries such as Russia and China. - The CIA would make sense to oversee this visa program, receiving input from a Congress/Senate vote on how many visas should be given out.

The two Palmisano articles (2006 & 2016) address the Globally Integrated Enterprise, what have been the two distinct shifts for multinational enterprises?

The two shifts are that, until recently, companies generally chose to produce goods relatively near where they are sold. However today, companies are revolutionizing global supply chain through the global integration of raw materials/products to reduce costs and obtain new skills/knowledge