History and Geography: The Foundations of Culture

Chapter 3

McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc. All rights reserved.

Chapter Learning Objectives

1. The Importance of History and Geography in the Understanding of International Markets

1. The Importance of History and Geography in the Understanding of International Markets

2. History and Contemporary Behavior2. History and Contemporary Behavior

3. History is Subjective3. History is Subjective

4. Manifest Destiny and Monroe Doctrine4. Manifest Destiny and Monroe Doctrine

Chapter Learning Objectives

5. Geography and Global Markets5. Geography and Global Markets

6. Products and Marketing6. Products and Marketing

7. Dynamics of Global Population Trends7. Dynamics of Global Population Trends

8. Trade Routes and Industrialization8. Trade Routes and Industrialization

Historical Perspective In Global Business

Historical insights of a country are important for understanding:Historical insights of a country are important for understanding:

Attitudes about the role of government and businessAttitudes about the role of government and business

Relations between Managers and SubordinatesRelations between Managers and Subordinates

Sources of Management AuthoritySources of Management Authority

Attitudes toward Foreign CorporationsAttitudes toward Foreign Corporations

History and Contemporary Behavior

1. Historical events between nations influence business and history

1. Historical events between nations influence business and history

2. Why do the Japanese have such strong loyalty toward their companies?

2. Why do the Japanese have such strong loyalty toward their companies?

3. Why is a distribution system so difficult for an outsider to develop?

3. Why is a distribution system so difficult for an outsider to develop?

4. Why are decisions made by consensus?

4. Why are decisions made by consensus?

History and Contemporary Behavior

5. Why are the Japanese loyal to family, to country, to company, and to social group?

5. Why are the Japanese loyal to family, to country, to company, and to social group?

6. Why do the Japanese cooperate?

6. Why do the Japanese cooperate?

7. Answers found in Japanese history and Confucian philosophy in which loyalty is to country

7. Answers found in Japanese history and Confucian philosophy in which loyalty is to country

8. In short, any nation’s business and political culture is shaped by history

8. In short, any nation’s business and political culture is shaped by history

Geography and Global Markets

Study of geography is important in theevaluation of marketsStudy of geography is important in theevaluation of markets

Need to be knowledgeable about the effects ofgeographic diversity on the economic profilesof various nations

Need to be knowledgeable about the effects ofgeographic diversity on the economic profilesof various nations

Climate and topography are examined as facetsof the broader and more important elements ofgeography

Climate and topography are examined as facetsof the broader and more important elements ofgeography

Channel Tunnel: Between UK and France

–7 years and half–50 kilometers(38.6 kilometers under water)–A miracle of world engineering

Oresund Link (between Denmark and Sweden)

Colonia Bridge (between Argentina and Uruguay)

Climate and Topography

Knowledge about geography, the climate and physical terrain when appraising a marketKnowledge about geography, the climate and physical terrain when appraising a market

Influences marketing from product adaptation to more profound influences on the development of marketing systems

Influences marketing from product adaptation to more profound influences on the development of marketing systems

Climatic features affect uses and functions of products and equipmentClimatic features affect uses and functions of products and equipment

Social Responsibility & Environmental Management

Firms should comply regulations against environmental pollution and disposal of hazardous waste

Firms should comply regulations against environmental pollution and disposal of hazardous waste

Sustainable development guides many governments and multinational companies today

Sustainable development guides many governments and multinational companies today

Economic development and protection for the environment can coexistEconomic development and protection for the environment can coexist

Firms required to be socially responsible especially in foreign marketsFirms required to be socially responsible especially in foreign markets

Sustainable Development: Key Propositions

Since environment problems pay no respect to borders, global and regional collaboration is sometimes needed to complement national and regional regions

Since environment problems pay no respect to borders, global and regional collaboration is sometimes needed to complement national and regional regions

There is a crucial and potentially positive link between economic development and the environment

There is a crucial and potentially positive link between economic development and the environment

The costs of inappropriate economic policies on the environment are very highThe costs of inappropriate economic policies on the environment are very high

Addressing environmental problems requires that poverty be reducedAddressing environmental problems requires that poverty be reduced

Economic growth must be guided by prices that incorporate environmental valuesEconomic growth must be guided by prices that incorporate environmental values

Consumer Related Issues

• UNICEF sponsored this advertising campaign against child labor. The field of consumer behavior plays a role in addressing important consumer issues such as child exploitation.

Natural Resources

Supply of natural resources not endlessSupply of natural resources not endless

Importance of oil and gas in world energyconsumptionImportance of oil and gas in world energyconsumption

Human labor provides the preponderance of energy in many countriesHuman labor provides the preponderance of energy in many countries

Importance of natural resources especiallyto manufacturing of productsImportance of natural resources especiallyto manufacturing of products

Global Population Trends

Important to know about currentpopulation trends because peopleconstitute markets for variouscategories of goods

Important to know about currentpopulation trends because peopleconstitute markets for variouscategories of goods

Necessary to know about: (1) rural/urban population shifts(2) rates of growth (3) age levels, and (4) population control (5) rural-urban migration of world population(6) population decline and aging (7) worker shortage and immigration

World Trade Routes and Communication Links

• Knowledge about trade routes over land, sea, and air important in making marketing decisions

• The majority of world trade is among the most industrialized and industrializing countries of Europe, North America, and Asia

• Need to be aware about communication links—the underpinning of all commerce

• Impact of the Internet revolution especially for global marketing of products

The Triad: Trade Between the United States and Canada, the European Community, and Japan ($ billions)

EUROPEANCOMMUNITY

UNITED STATES & CANADA

JAPAN

For additional figures see: “Indicators of Market Size for 115 Countries I” Crossborder Monitor, August, 1997, pp.4-8

195.4 66.3

151.6 89.0

91.5

141.7