CBA 300 Lecture Notes - Lecture 1: Anti-Globalization Movement, Capital Flight, Market Saturation
11 Jan 2017
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Ch. 1: Globalization & Anti-Globalization
What is Globalization?
• The global Integration of consumer, Business and Financial market
• The global integration of labor & production
• And a lot more:
o Cultural exchange
o Environmental issue
o Migration
Drivers of Globalization
1. Political Decisions
a. Lower Trade & Investment Barriers
b. Privatization & deregulation within countries
c. Opening of economies to outside world
d. Multinational & Bilateral agreements
2. Business Imperatives
a. Home Market saturation
b. Economies of scales & scopes
c. Savings from outsourcing & offshoring
d. Global competition
e. “Financialization” of corporation (i.e. focus on short term profits)
3. Advances of Technology
a. Computers
b. Telecommunications
c. The Internet
d. Logistics
The Anti-Global Backlash
• Globalization has benefited 100s of millions of people, but not everyone
o Some nations have been left out. (ex: North Korea, Laos, Bolivia)
o Transition to freer market has been difficult for many countries
o Investment capital has been skittish (e.g. 1997 monetary crisis; capital flight from
Venezuela & Russia)
o Within nations some group have profited immensely (e.g. top 1%, overseas
Chinese), while others have suffered (e.g. less educated American men)
• Farmers in developing countries has difficulty competing with subsides, capital- intensive
foods from U.S & other rich nations.
o U.S produce corn/maize
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Anti-Global Forces
• Some governments (e.g. North Korea)
• Labor Interests
• Environmental Interests
• Anti–business Interests
• Protectionist & anti-immigrant interests in U.S & Europe
• Donald trump’s “ us vs. them” language appeals to prejudice
o Research shows that negative attitudes towards “ out groups” are strong predictors
of trade protectionism
• Bernie Sanders’ anti- global protectionism is part of an anti-corporate message
o His supporters are far less protectionist than Trump’s
Global Dilemma
• The benefits of globalization (e.g. cheaper & better quality goods& services) are diffused
widely & taken for granted
• The downsides of globalization (e.g. job losses in both rich & poor countries) tend to be
focused.
• Opposition to migrate has been conflated with anti-globalization
International Business strategies
• Multi Domestic vs. global strategies
o Multi domestic companies allow countries affiliates to formulate own local
strategies
o Global companies allow countries
Companies Doing Business Internationally
• Big firms known as global, international, multinational, or transnational companies.
• Smaller firms known as SMEs ( Small-to-Medium sized enterprises)
Global Environmental Forces
• Controllable(internal) v. uncontrollable (external) force
• Domestic v. foreign v. international environments
Self- Reference Criterion
• The self-reference criterion is the naïve assumption that different cultures operate like
one’s own.
• SRC operates at both personal & societal levels (e.g. assumptions about the Internet).
find more resources at oneclass.com
find more resources at oneclass.com
