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University of Toronto Scarborough
Management (MGT)
Zachariah Campbell

Globalization and International Trade  Globalization: movement of goods, services, technology, investment, ideas, and people around the world  Happened when trade barriers are reduced after WWII  Positive aspects of globalization:  Outsourcing:  Lower Prices  Improved human rights  Increased productivity  Innovation  Better jobs  Increased capital flow  Negative Aspects  Lost/fear of lost CDN jobs  Loss of CDN productivity  Exploitation of cheap labour  Increased pollution  Unhealthy products  Spread of disease  Increased income gap  Influence of MNCs (Multination corporations) on government  Globalization strategies: companies use different strategies with different parts of the world  Global Strategy: regards world as one big market with decisions made in headquarters  Adv: massive economic scale (produce bulk quantities)  Disadv: require rapid syncing of global countries, and little care for individual cultures  Ethnocentric: the idea that everyone will want and respond to the product the same way  Multidomestic strategy: customizes products and marketing for local culture  Decisions made decentralized  Adv: better political, product, and responsiveness from local people  Polycentric: local management is best strategy for whats best  Transnational strategy: combines the best of global and multidomestic  Maintains needs of local culture, but still stay cohesive to the global scale  Products made cheap centrally, then marketing customizes locally  Geocentric: values both local differences and whats best for company  Often very difficult to maintain the balance between the 2 however Trade Agreements  Trade Agreement: enforceable treaty between 2 or more countries that addresses the movement of goods and services, eliminates trade barriers, terms of trade, and encourage foreign investment  Canada’s trade agreements: NAFTA, EFTA, Canada-Chilie FTA, Canada-Israel FTA  NAFTA: sets rules surrounding movement of goods, services, investments in N.America  Adv: Higher prosperity and efficiency for many companies  Higher paying engineering jobs in Canada  Free flow of resources makes NA a stronger competitor to Asia markets  Trade has tripled for partners (894B) and exchange rate doubled 
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