B A 360 Chapter Notes - Chapter 2: North American Free Trade Agreement, World Trade Organization, Operations Management
Document Summary
Globalization means customers, talent, and suppliers are worldwide. Reasons domestic business operations decide to change to some form of international operation: Can be improved by locating facilities in countries where unique resources are available. Many international operations seek to reduce risks associated with changing currency values as well as take advantage of the tangible opportunities to reduce their direct costs. Financial hiding - purchasing currency options to protect against negative exchange rate changes. Operational hedging - intentionally building extra capacity in different countries and then shifting production from country to country as costs or exchange rates vary. Maquiladoras - free trade zones between u. s. and mexico. Allows manufacturers to cut their costs by paying only for the value added by mexican workers. World trade organization (wto) - international organization that promotes world trade by lowering barriers to the free flow of goods across borders.
