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Lecture 4

Week 4

5 Pages
54 Views

Department
Global Management Studies
Course Code
GMS 200
Professor
Robert Hudyma

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Chapter 5
International Management and Globalization
Global Economy – resources supplies, product market, and business competition are
worldwide in scope
Globalization – is the process of growing interdependence among elements of the global
economy
International Management – involves managing operations in more than one country
Example: McDonalds, more than 70 countries
Global Manager – is culturally aware and informed about international affairs
-This person is aware of international development, working with people from
different cultures and changes in the world
Europe
- Is a place of dramatic political and economic development
-European Union – is expanding to 22 countries that agree to support mutual
economic growth by removing barriers and eliminate frontier controls, create
uniform minimum technical product standards, and lift competitive barriers for
banking and insurance
-The common European currency is Euro
-The expected regional benefits of an expanding EU includes higher productivity,
lower inflation and steady growth
-Have over 375 million customers and Mexican have child labour
The Americans
-Canada, United Sates and Mexico are joined in the North American Trade
Agreement (NAFTA)
oVery hard to get approval from the NAFTA is not easy
oAmerican politicians were concerned about potential loss of jobs to
Mexico
oSays the Mexico does not operate by the same social standards
Environmental protection and child labour
-This agreement largely frees the flow of goods and services, workers and
investments within a regional that has more potential consumers than its European
rival, the EU
-Maquiladoras are foreign manufacturing plants that operate in Mexico with
special privileges
oImport materials, components and equipment duty free
oIncrease jobs in Mexico, to help develop skilled local worker
oThey employ low cost labour and these jobs are going to Mexicans rather
then the NAFTA
Asia and the Pacific Rim
-China and India have economics that is growing at more than three times the
average rate of their industrialized countries
-China is the major exporters of appeals, electronics, sport goods and other goods
www.notesolution.com
-Vietnam is fast advancing, with high literacy rate, an educational workforce,
speaks English and intends to become a world centre for business process
outsourcing
oAsians countries already respect a third of the global marketplace and rans
as the worlds top markets in cars and telecommunication equipment
oHighly skilled brainpower is increasingly on high on its list of advantages
oGoals in expanding in global markets for medical transportation and
accounting services
Japan
-Has 1/20th crime rate to that of USA
-Shinto religion has about 80000 gods
-Bosses are 60-70 ages
-Teamwork
-Work fifteen workdays are common, work comes before family
-There are a millions suggestions a year for improvements
International Business Challenge
International businessesconduct international transactions across national boundaries
The reasons why companies go international include these attractions of the marketplaces
of the world:
-Profit – global operations offer greater profit potential
-Customers - Global operations offer new markets to sell products
-Supplies – Global operations offer access to needed raw materials
-Capital - Global operations offer access to financial resources
-Labour – Global operations offer access to low labour costs
Forms of International Business
-There are two common forms of international business Market entry strategies and
direct investment strategies
Market entry strategies – that involve sale of goods and services to foreign markets but
do not require expensive capital investments
Direct Investment Strategies – require major capital investments buy create rights of
ownership and control over operations
Market Entry Strategies
First step into a business global sourcing – the process of purchasing materials,
manufacturing components or business services from around the world
Second step – involve exporting and importing
Exporting – selling locally made products in foreign countries
Importing – is the process of buying foreign goods and selling them in domestic markets
Another form of international business is the licensing agreements and franchising
Licensing agreement – one firm pays a fee for rights to make or sell other company
products
Franchising – a fee is paid for rights to use another firms name and operating methods
www.notesolution.com

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Description
Chapter 5 International Management and Globalization Global Economy resources supplies, product market, and business competition are worldwide in scope Globalization is the process of growing interdependence among elements of the global economy International Management involves managing operations in more than one country Example: McDonalds, more than 70 countries Global Manager is culturally aware and informed about international affairs - This person is aware of international development, working with people from different cultures and changes in the world Europe - Is a place of dramatic political and economic development - European Union is expanding to 22 countries that agree to support mutual economic growth by removing barriers and eliminate frontier controls, create uniform minimum technical product standards, and lift competitive barriers for banking and insurance - The common European currency is Euro - The expected regional benefits of an expanding EU includes higher productivity, lower inflation and steady growth - Have over 375 million customers and Mexican have child labour The Americans - Canada, United Sates and Mexico are joined in the North American Trade Agreement (NAFTA) o Very hard to get approval from the NAFTA is not easy o American politicians were concerned about potential loss of jobs to Mexico o Says the Mexico does not operate by the same social standards Environmental protection and child labour - This agreement largely frees the flow of goods and services, workers and investments within a regional that has more potential consumers than its European rival, the EU - Maquiladoras are foreign manufacturing plants that operate in Mexico with special privileges o Import materials, components and equipment duty free o Increase jobs in Mexico, to help develop skilled local worker o They employ low cost labour and these jobs are going to Mexicans rather then the NAFTA Asia and the Pacific Rim - China and India have economics that is growing at more than three times the average rate of their industrialized countries - China is the major exporters of appeals, electronics, sport goods and other goods www.notesolution.com
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