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House Rules
1. The back row of students will clean up the classroom and straighten chairs/tables
after each session.
2. No electronic distractions—if you violate this rule you will stand and sing a Justin
Bieber or Jonas Brothers song of my choice.
House Rules
3. Cheating brings pain. Failing to confess cheating brings pain. Failing to report cheating brings pain.
Reporting (and, when possible, documenting) cheating brings rewards.
This course can help you
Understand our world betterGet better jobsGet internationally oriented jobsBe more comfortable with people from other countriesSee the world with new eyes Make your life more interesting
We’ll talk about
Globalization, internationalizationRole of technology, cost advantagesCultureEntry methods/business formsImporting/exporting how-toA variety of cases/examples
ThinkHigh participationCross-functional, integrated view of businessTrust, honesty, integrity, high standards
AND
Sufficient time and energy
Shared goals to start with
Symptoms: Lousy papersNot keeping upCan’t answer questions or contribute to discussionAbsence, tardiness, sleepinessDifficulty with midterm exam
Causes:Conflicting prioritiesExcessive course loadJuggling a job and too many courses
Typical Workload Problems
Syllabus and schedule highlights
http://yourpeakescape.com/uscupstate
GradingPreparation/participation—see syllabus
Ten-point scale, no pluses/minuses
Papers: part of prep/part, follow the format, due on time.
Section 1: Globalization and International Linkages
Implications of globalization for countries, industries, firms, and communities.
Major trends in global and regional integration.
Changes in economic power, trade and investment flows.
Major economic systems and recent developments.
International Management
International management:Managing in a multinational company;Adapting management practices to different economic, political, and cultural environments.
Multinational corporation (MNC):Operations in more than one countryInternational salesManagers and owners from a mix of countries
Globalization and Internationalization
Globalization: process of integration among countries with a vision of a single market entity: Social Economic Political Technological Cultural Internationalization: when a business crosses national and cultural borders.
Globalization: Pros and Cons
Pros: economic growth, jobs, technology, lower prices.Pros: economic growth, jobs, technology, lower prices.
Cons:Cons: losing jobs to lower-wage countries;losing jobs to lower-wage countries; trade deficits;trade deficits; slow wage growth;slow wage growth; environmental and social impacts.environmental and social impacts.
Global and Regional Integration:
Global Agreements: WTO World Trade Organization GATT General Agreement on Tariffs and Trade
Regional Agreements: NAFTA North American Free Trade Agreement CAFTA U.S.-Central American Free Trade Agreement EU European Union ASEAN Association of Southeast Asian Nations FTAA Free Trade Agreement of the Americas
International Economic Power in the Global Economy:
World is changing due toWorld is changing due toEconomic integration Economic integration Growth of emerging marketsGrowth of emerging markets
Trends in International Investments and Trade
Investment:Investment:80% of foreign direct investment (FDI) from 80% of foreign direct investment (FDI) from
developed countries developed countries Continuing rise, inc from new investors (e.g. China)Continuing rise, inc from new investors (e.g. China)
Trade: Trade: >50% world trade is United States, European >50% world trade is United States, European
Union and JapanUnion and JapanContinuing growthContinuing growth
Economic Systems of the World
Market Economy Market Economy
Command EconomyCommand Economy
Mixed EconomyMixed Economy
Economic Performance by Region
North AmericaNorth AmericaSouth AmericaSouth AmericaEurope (EU, Central and Eastern Europe)Europe (EU, Central and Eastern Europe)Asia (Japan, China, emerging markets of Asia)Asia (Japan, China, emerging markets of Asia)Other developing and emerging countries (India, Other developing and emerging countries (India, Middle East, Central Asia, Africa) Middle East, Central Asia, Africa)
Remember: History Matters!!Remember: History Matters!!
North America
North America:Generally free market economies
United States:Good market for foreign MNCForeign investment welcomedU.S. firms dominate many European markets; gaining in Asia
Canada:Biggest U.S. trade partnerBig US investment in CanadaCanada legal/business environment similar to US
Mexico:Biggest Latin American economy Very strong maquiladora industry w/ US markets Rising trade with Europe, AsiaCompetes with Asia for US market
South America
History of high foreign debt and high inflation Brazil, Chile, Argentina—strongest economiesHistory of trade barriers now declining
European Union
EU has emerged as a functional economic union EU has emerged as a functional economic union
Links/spread into Central , Eastern, Southeastern Links/spread into Central , Eastern, Southeastern EuropeEurope
Substantial FDI in EU: M&A, alliances, etc.Substantial FDI in EU: M&A, alliances, etc.
Central and Eastern Europe
Big examples: Russia, Czech Rep., Hungary, PolandBig examples: Russia, Czech Rep., Hungary, PolandDismantling of price controls and state ownershipDismantling of price controls and state ownership1990s/2000s: Perestroika—economic and political 1990s/2000s: Perestroika—economic and political restructuring, Privatizationrestructuring, PrivatizationInflation, crime, corruption, wealth disparities. Inflation, crime, corruption, wealth disparities. Western Europe/China investingWestern Europe/China investingMembership in International Monetary Fund (IMF), some Membership in International Monetary Fund (IMF), some in EU,in EU,Political uncertainty, old habits/relationships die hardPolitical uncertainty, old habits/relationships die hard
Asia
JapanJapanPhenomenal success 1970s/1980sPhenomenal success 1970s/1980sMinistry of International Trade and Industry (MITI)Ministry of International Trade and Industry (MITI)KeiretsusKeiretsus
Vertically integrated industriesVertically integrated industriesTen year recession in 1990sTen year recession in 1990s
Bad bank loans for real estate—billions of dollarsBad bank loans for real estate—billions of dollarsNow: International competition—China, SE AsiaNow: International competition—China, SE Asia Ageing populationAgeing population
ChinaChinaAnnual growth 8-11%Annual growth 8-11%Foreign investors interested despite political risk, Foreign investors interested despite political risk, trade piracy, restrictionstrade piracy, restrictionsTrends: Income disparities, pollution, political unrestTrends: Income disparities, pollution, political unrest
The Four TigersSouth Korea
Chaebols (large family-held Korean conglomerates)Relationship issues: China, North Korea
Hong KongNow part of People’s Republic of ChinaWealthy free market system/tension with ChinaSingapore Singapore
Highly educated, high-tech islandHighly educated, high-tech island
TaiwanTaiwan Tension with China, which claims itTension with China, which claims it High-tech and industrialHigh-tech and industrial
Southeast Asia
Baby Tigers (Thailand, Malaysia, Indonesia):Baby Tigers (Thailand, Malaysia, Indonesia):Large population Large population Cheap laborCheap laborNatural resourcesNatural resourcesAttractive to outside investorsAttractive to outside investorsCorruptionCorruption
Developing and EmergingIndiaIndia
Huge poor population, big middle classHuge poor population, big middle classGrowth in software, ITGrowth in software, ITAttractive to West (educated, English speaking, Attractive to West (educated, English speaking, technologically sophisticated)technologically sophisticated)
Middle East and Central AsiaMiddle East and Central AsiaOil and natural resourcesOil and natural resourcesUnemployment, politics, religionUnemployment, politics, religion
AfricaAfricaNatural resourcesNatural resourcesGenerally poor, weak infrastructureGenerally poor, weak infrastructure1,000 languages and dialects1,000 languages and dialectsPoverty, starvation, war, illiteracy, corruption, Poverty, starvation, war, illiteracy, corruption, overcrowding in various partsovercrowding in various parts
Developing and Emerging
Some questions for you
1. What are pros and cons for globalization in different parts of the world?
2. How has NAFTA affected North America and the EU affected Europe? What importance do these economic pacts have for international managers in North America, Europe and Asia?
3. Why would MNCs be interested in South America, India, the Middle East, Central Asia, and Africa, the less developed and emerging countries of the world?
What we just didSection 1:
Globalization and International Linkages
Implications of globalization for countries, industries, firms, and communities.
Major trends in global and regional integration.
Changes in economic power, trade and investment flows.
Major economic systems and recent developments.
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