Transcript Chapter 01 Student PowerPoint Presentation - McGraw

Global Business Today
8e
by Charles W.L. Hill
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document
may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
Chapter 1
Globalization
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What Is Globalization?
Question: What is globalization?
• Globalization - the trend towards a more integrated global
economic system
• Globalization of markets - the merging of historically
distinct and separate national markets into one huge
global marketplace
• Globalization of production - the sourcing of goods and
services from locations around the globe to take advantage
of national differences in the cost and quality of factors of
production (labor energy, land, and capital)
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document
may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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The Emergence of Global
Institutions
Global institutions:
Manage, regulate, and police the global market
place
Promote the establishment of multinational
treaties to govern the global business system
Notable global institutions include the:
World Trade Organization (WTO)
International Monetary Fund (IMF)
World Bank
United Nations (UN)
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document
may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Drivers of Globalization
Question: What is driving the move toward greater
globalization?
•
Two macro factors:
1. Declining trade and investment barriers
2. Technological change
•
•
International trade occurs when a firm exports
goods or services to consumers in another country
Foreign direct investment (FDI) occurs when a firm
invests resources in business activities outside its
home country
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may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Drivers of Globalization
Average Annual Percentage Growth in Volume of Exports and World GDP, 1950-2010
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may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Changing World Output
and World Trade
Question: How has world output and world trade
changed over the last 50 years?
• In the 1960s:
• The U.S. dominated the world economy and the world
trade picture
• The U.S. dominated world FDI
• U.S. multinationals dominated the international business
scene
• About half the world-- the centrally planned economies of
the communist world-- was off limits to Western
international business
• Today, much of this has changed
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may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Changing World Output
and World Trade Picture
The Changing Demographics of World GDP and Trade
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may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Changing Foreign Direct Investment
Question: How has the foreign direct investment picture
changed over the last 50 years?
• The share of world output generated by developing
countries has been steadily increasing since the 1960s
• The stock of foreign direct investment (total cumulative
value of foreign investments) generated by rich
industrial countries is declining
• Cross-border flows of foreign direct investment are
rising
• The largest recipient of FDI is China
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may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Changing FDI Picture
Percentage Share of Total FDI Stock, 1980 - 2010
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may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Changing FDI Picture
FDI Inflows, 1988 - 2010
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may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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The Changing Multinational Enterprise
Question: What is a multinational enterprise?
• A multinational enterprise is any business
that has productive activities in two or more
countries
• Since the 1960s:
• There has been a rise in non-U.S. multinationals
• There has been a rise in mini-multinationals
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document
may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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The Changing World Order
Question: Why is the changing world order important
for firms?
• The collapse of communism in Eastern Europe
• New export and investment opportunities
• Economic development in China
• Huge opportunities despite continued Communist control
• Free market reforms and democracy in Latin America
• New markets and new sources of materials and production
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document
may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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The Global Economy in the 21st Century
Question: What will the global economy look like in
the 21st century
A more integrated global economy:
New opportunities for firms
But, political and economic disruptions can
throw plans into disarray
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document
may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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The Globalization Debate
Question: Is the shift toward a more integrated
and interdependent global economy
a good thing?
• Many believe that globalization is promoting
greater prosperity in the global economy,
more jobs, and lower prices for goods and
services
• Others feel that globalization is not beneficial
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document
may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Managing in the Global
Marketplace
Question: What does the shift toward a global
economy mean for managers within
an international business?
Managing an international business (any firm
that engages in international trade or
investment) differs from managing a domestic
business in four key ways
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may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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Managing in the Global
Marketplace
1. Country differences require companies to
vary their practices country by country
2. Managers face a greater and more complex
range of problems
3. International companies must work within
the limits imposed by governmental
intervention and the global trading system
4. International transactions require converting
funds and being susceptible to exchange rate
changes
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner. This document
may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
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