What is Globalization?
the trend towards a more integrated global economic system
What is globalization of markets?
the merging of historically distinct and separate national markets into one huge global marketplace
Example of globalization of markets
coca cola
starbucks
mcdonalds
what is the globalization of production
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
Example of globalization of production
boeing and vizio
What are the 4 global institutions>
WTO
IMF
WB
UN
GATT
What are global institutions
manage, regulate, and police the global market place
promote the establishment of multinational treaties to govern the global business system
the world trade organization
polices world trading system and ensures nations adhere to the rules established in WTO treaties
International Monetary Fund
maintains order int he international monetary system
World Bank
promotes economic development
United Nations
maintains international peace and security, develops friendly relations among nations, cooperates in solving international problems and promotes respect for himan rights, and is a center for harmonizing the actions of nations
General Agreement of trade and tariffs
regulated world trade until 1994
what is driving the move toward greater globalization?
1. declining trade and investment barriers
2. technological change
international trade
occurs when a firm exports goods and services to consumers in another country
foreign Direct investment (FDI)
occurs when a firm invests resources in business activities outside its home country
what technological change have increase globalization
microprocessor
web based transactions
cheaper shipping
In the 60s the Us dominated what?
world trade, FDI, multinationals, and economy
in the early 1960s
Us dominant industrial power accounting for about 40.3% of world manufacturing output
by 2008
us accounted for only 20.7%
rapid growth in countries like china, india, and brazil
what is stock of foreign direct investment
total cumulative value of foreign investments
who is the largest recipient of FDI
china
what is a multinational enterprise
any business that has productive activities in two or more countries
what are mini multinationals
small or medium sized companies that have activites in two or more countries
What are the concerns of the critics of globalization
anti-globalization protesters now turn up at almost every major meeting of the global institution
fear that globalization is forever changing the world in a negative way
fear that power will shift from national governments and toward supranational organiz
what do supporters of globalization view
promotes greater prosperity
more jobs
lower prices for goods and services
what 4 ways do managing an international business from a domestic?
1. countries differences require companies to vary their country by country
2. managers face a greater and more complex range of problems
3. international companies must work within the limits imposed by governmental intervention and the global trading sy