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Final ADMS.docx

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York University
Administrative Studies
ADMS 1000
Jennifer Kuk

• PART 1 – 20 multiple choice (total 20 marks) • PART 2 – 3 SHORTANSWER questions (total 20 marks) • PART 3 - 1 case followed by 3 questions (total 60 marks) Session 7& 8 GLOBALIZATION (ch.6&8) 1. Define globalization - 3 part definition  Expansion of degree and forms of cross-border transactions among people, assets, goods and services  Growth in direct foreign investment across the world  Increase in economic interdependence – including the integration of world markets & economies 2. Reasons for going global Push factors – Competition, more democracy, reduced trade barriers, improved technology Pull factors – growth potential, need for resources – materials/people 3. Types/forms of global business Outsourcing, Joint Ventures, Subsidiaries, Foreign Direct Investment, Licensing and Franchising, Export & Imports, Mergers &Acquisitions 4. The mnc/borderless/transnational - Definition - It is an enterprise that operates manufacturing and marketing facilities in two or more foreign countries controlling its operations from the firm’s home country - It is on the rise due to the gradual reduction in trade barriers among many nations of the world - Multinational corporations capitalize on national differences in the cost and quality of production MNC’s/MNE’s are global businesses  They are usually very large e.g. accounting for much of the world economy  Therefore their business activity can have serious positive or negative consequences for local economies  HQ (headquarters) is usually located in the home country – usually in a developed country, e.g. USA, France, Germany, UK & Japan.  Subsidiaries located in the host country – usually in the developing world.  Referring to MNC’s transnational corporations or borderless corporations (per our text) simply underscores the increasing pervasive presence of MNC’s and the fact that they easily cross many different borders. Pros for the host country - Economic development – e.g. employment - Brings management expertise - Introduces new technology and relevant training - Develops trade - Unites cultures & nations - Supports global co-operation Cons - No allegiance to host country - Mobile profits - Power held in host country e.g. R & D - Difficult to control 5. Trade agreement – NAFTA N orthA merican Free T radeA ct Definition: - To Reduce/eliminate tariff barriers on - Almost all goods and services traded - To facilitate cross-country investment - To establish rules for government subsidies - To establish universal rules for health, - Safety & the environment - To provide a common market among members N - Business A- Consumers F - Employment T - Trade A- Culture Free TradeAreas – all barriers to trade among members are removed. Retain autonomy in selecting trade agreements with non-members, e.g. NAFTA,APEC Pros and cons IMPACT ON TRADE Pro • Increased trade (from 25% to 43% of GDP in years following NAFTAagreement - between 1990-99) Con • Canada still over-reliant on exporting low valued-added natural resources versus very little high-tech exports • Too dependent on trade with the US compared to other international trading partners. • IMPACT ON CANADIAN CONSUMERS • Pro - Canadian consumers are given more choice and exposed to competitive products with free trade. • Con – if big U.S. firms come to dominate retail, then we could end up with monopolies (reduced competition) which might harm the consumer in terms of prices and quality of goods/services. IMPACT ON CANADIAN EMPLOYMENT & BUSINESS Pro -  Canadian companies that require inputs/resources from US business can obtain them more cheaply & pass these savings on to the consumers.  Canadian gets more access to United States markets and can generate more sales.  More employment as a result of increase growth in sales. Con - Competition may be too strong – forcing bankruptcy, job losses through closures. Job losses could also arise from United States companies deciding to shut down their Canadian subsidiaries and exporting their tariff-free goods to Canada. IMPACT ON CANADIAN CULTURE Pro – Doesn’t impact Canadian culture, cultural exports $4.5 bn and big market in royalties Con – Increasing foreign domination of the Canadian economy will transform Canada into a pure economic subsidiary of the United States – so May destroy Canadian culture, Canada may become a ‘subsidiary of USA IMPACT ON CANADIAN COMPETITIVENESS Pro – One of the central objectives was to encourage Canadian businesses to become more competitive through exposing Canadian businesses to greater competition from US business. Foreign competition forces domestic businesses to improve their operations and their products or services. Con – NAFTA did not result in increase in productivity of Canadian business – U.S. productivity rates have increased at about twice the rate of Canadian productivity increases. (The success that Canada has experienced in international trade has been achieved largely through Canada’s relatively weak dollar e.g., Hollywood film industry coming to Canada.) Session 9 Government & Business (ch.7) 1. Government as guardian of society - (Tax collector)  Collection of revenue taxes (individual, corporation, sales, property) - Collection of restrictive/ regulatory taxes (excise & customs duties/tariffs) e.g. on Tobacco,Alcohol etc  - Crown corporation or public enterprise is an organization accountable, through a minister, to parliament for its operations. Crown corporations may be federal (e.g., Canada Post, the Canadian Broadcasting Corporation [CBC], the Canadian Wheat Board) or provincial (e.g., the Liquor Control Board of Ontario [LCBO]. Number of CC’s has been decreasing along with the number of employees. – Reasons for crown corps:  CCs ‘natural monopolies’, e.g. electricity  CCs protect & provide services that private enterprise might not wish to pursue.  CCs allow for more government control  CC’s implement public policy & safeguard national interests, e.g.Air Canada and Petro.  CC’s protect vital industries, e.g. CNR (Canadian National Railway) - Regulation  Imposes constraint to modify economic behaviour in the private sector, e.g. Energy, Health & Safety, Labour, Food, Consumers etc  Imperfect Competition –intervention ensures appropriate provision of goods & services.  Public Interest – protects consumers through regulation, limitations imposed on business (e.g. foreign ownership, management, pricing etc) Government Legislation that regulates Business: Charter of Rights and Freedom, Canadian Human RightsAct, Canadian Labour Code, Bankruptcy and InsolvencyAct, Consumer Protection and Taxes: Income, property, payroll, sales and excise. – Purpose is maintaining domestic labour forces, protecting against unfair trade, subsidizing global business activity, encouraging FDI, nurturing young industries and keeping a trade balance.  Federal & Provincial regulation ensures a fair, efficient & competitive marketplace e.g. product safety, labelling, guarantees  Competition Bureau, Health Canada & Environment Canada are key players What is the upside with gov
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