Textbook Notes (363,379)
Canada (158,356)
MGTA01H3 (583)
Chapter 5

Chapter 5 management.docx

6 Pages
Unlock Document

University of Toronto Scarborough
Management (MGT)
Chris Bovaird

Chapter 5 management International Business/Trade  Selling products to another country  For example: selling swiss chocolate to Canadian customers International trade/business has been going on for thousands and thousands of years Globalization -> due to technological innovations that help communication + transportation for cheaper amounts -> makes it easier to communicate around the world -> developments allowed for international trade international business why? - Canada is an “open” economy  Doors are wide open to people selling us their stuff  Open to stuff made in different countries being available in our stores  Open for business  International business/trade is important to Canada North Korea  Closed economy  You can’t buy anything made some place else  Kim family doesn’t want the north Koreans to know how bad the goods are  No imports/exports India  Accused of not being fully open  Doesn’t welcome Japanese electronics  Doesn’t welcome American cars  Makes it expensive to sell other country stuff in their country due to their huge population  If we make stuff at home everyone has a job (indian theory) Americans (partly open but think of ways to make it less open) grasped the indian theory as well due to the increase in employment  Looking for a scapegoat  Chinese make a lot of good stuff cheap  Law-> has to be same American content  Stimulus money to give jobs to construct stuff but rule was wood had to be purchased from an American company Canada is an open economy because it makes us better off – raises living standards If you buy the best stuff – from countries who have made it for the longest amount of time and the cheapest allows for Canadians to have the best and end up better off  China and Germany + us and japan have the most exports  Canada is 11 1.3 trillion = 30% Canadian GDP = exports - Canadians sell to americans - too dependent on one customer = bad - should sell more to Chinese, Japanese, brazillians and germans NAFTA  North America free trade agreement  USA, Canada and mexico  450 million people  No barriers, no protection  Promotes trade between the three  Canada is dependent on selling most goods to US because they’re next door, speak the same language and share a world view  About 20 years ago, Canadian government and US government believed that since they share the continent they devised an agreement to distinguish barriers and fees between them two  Allows for an “open” border  Increased exports -> imports between the US  Involved mexico as well  Basically get rid of artificial barriers Competitive advantage -> two sources -> absolute and comparative  What we decide to sell vs what we decide to buy  No country is capable of producing everything cheaply and efficiently  Not everything can be better than everyone else  Some countries have advantage over others in different areas  It’s faster and cheaper to make something in the home country, sometimes its faster and cheaper to buy things from elsewhere  Can make some things but some you cant Absolute advantage  A nation can produce some things more cheaply and efficiently than in any other country  Now can Canada be better or worse than others? - Luck - Faith rd th  Canada -> 3 /4 largest exporter of wheat  Because we have flat and warm prairies so Canada has an absolute advantage because we have the resources - We have oil - We have lumber - Maple syrup - Gold Comparative Advantage  Industries expand and develop because a country has some skill/talent  So they decide to do what is #1 rather than a combination of their skills  Basically specialize in the most important  Example: instead of doing a double major do a major in your specialty  We could make consumer electronics but Japanese are better at it so we Canadians make cars and car parts and airplanes  We have absolute advantage of highways and our airport  We have money, engineers, raw materials and transportations all in a small area  Canadians non-comparative advantage – we don’t sell clothes
More Less

Related notes for MGTA01H3

Log In


Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.