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MGTA01H3 (583)
Chapter 5

Chapter 5 Readings

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University of Toronto Scarborough
Management (MGT)
Murphy Lawrence

CHAPTER 5 y Globalization the integration of markets globally y Imports Products that are made or grown abroad and sold in Canada y Exports Products made or grown in Canada that are sold abroadCONTEMPORRAY GLOBAL ECONOMY y International business is nothing new Trade can be traced back as far as 2000 BCE when North Africa tribes took dates and clothing to Assyria and Babylonia in the middle and traded them y International trade is becoming increasingly central to the fortunes of most nations of the world y Today more and more countries are encouraging international trade Countries are more feely opening their borders to foreign business offering incentives fro their own domestic business to expand international and making it easier for foreign firms to partner with local firms through various alliances y Several forces have sparked this sustainability of globalization For one thing governments and business have simply become more aware of the benefits of globalization to their countries and shareholdersTechnology has also made it simpler MAJOR WORLD MARKETPLACES y Contemporary world economy revolves around three major marketplaces North America Europe and Asia pacifichome to largest economies y World bank uses per capita income to divide countries into 4 groups o Highincome countries countries with per capita higher than 10 065 Ex Canada Us Korea Japano Upper middles income capita between 3255 and 10065 Ex Greece Hungary Poland Mexico Turkey o Lowe middle income capita between 8253255 X Colombia Guatemala Thailand o Low income capita below 825 Ex SomaliaNorth America y USA dominates the North American business region It is the single largest market place and enjoys stable economy Canada also plays a major role in the international economy USACanada are each others largest partners general motors Proctergambler Bombardier Nortel Networks Mexico has also become a major manufacturing center especially with cheap labour and low transportation costs along southern us borders Europe y Western Europe dominated by Germany the United Kingdom France and Italy has been a mature but fragmented marketplace The transformation of the EU however has unified the marketplace ECommerce and technology have also become increasingly important in this region Theres has been a huge in internet startups in southeast England Netherlands Scandinavian countries and Ireland is now the worlds number 2 exporter of softwareafter the usa y Eastern Europe once communist has also gained importance as a marketplace and producer For example corporations such as Nestle General motors and ABB asea borwn have all set up operations in Poland On the other hand gouv instability has hampered economic development in Russia Bulgaria Albania Romania and other countries in the region Asia Pacific y Consists of Japan china Thailand Malaysia Singapore south Korea Taiwan Philippines Indonesia Australia and new Zealand y Fuelled by strong entries in automobile electronics and banking industries the economies of these countries grew rapidly in the 7080 but fell in the crisis of the 90s y Asiapacific serves as competition to North America with firms such as Toyota Toshiba etc y Technology as it does in north America and Western Europe promised an important roel in this region However the emergence of technology has been hampered by poorly developed electronic infrastructure slower adoption of computers and information technology lowerincome customers and the crisis Thus tech region is facing a problem y ASEAN association of southwest Asian nations founded in 1967 as an organization for economic political social and cultural coperation
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