MGMT 1 Chapter Notes - Chapter 3: Complex Differential Form, Franchising, Economic Integration
Document Summary
No nation can produce all product its people want/ need. Seek to trade to meet needs of own people. Free trade : movement of goods & services among nations without political or economic barriers. The global market contains over 7 billion potential customers for goods and services. Productivity grows when countries produce goods/ services in which they have a comparative advantage. Global competition & less-costly imports keep prices down, so inflation does not curtail economic growth. Free trade inspires innovation for new products and keeps firms competitively challenged. Domestic workers can lose their jobs due to increased imports or production shifts to low-wage global markets. Workers may be forced to accept pay cuts from employers, who can threaten to move their jobs to lower-cost global markets. Moving operations overseas bc of intense competitive pressure often means loss of service jobs & growing numbers of white-collar jobs.
