CHAPTER 3History and Geography:

The Foundations of Culture

History of nations• Pakistan• Bangladesh• Russia• Iraq• Afghanistan• Sikkim• Nepal

Historical Perspective in Global Business

Historical insights of a country are important for understanding:

Attitudes about the role of government and business

Relations between Managers and Subordinates

Sources of Management Authority Attitudes toward Foreign

Corporations

History and Contemporary Behavior

Historical events between nations influence business and history

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

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

Why are decisions made by consensus?

History and Cont. Behavior Cont.

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

Why do the Japanese cooperate? Answers found in Japanese history and

Confucian philosophy: Jen: love, benevolent, concerns for one’s fellow men; and Li: describes a combination of manners, rituals, customs, etiquettes

History is subjectiveManifest Destiny: Meant that American were chosen people

to create a model society. It was used to justify US annexation of Texas, Oregon, New Mexico and California and later US involvement in Cuba, Alaska, Hawaii and Philippines

History is subjectiveThe Monroe DoctrineIs a cornerstone of US foreign policy; was

enunciated by President James Monroe1. No further European colonization in the New

World2. Abstention of the US from European political

affair3. Nonintervention of European governments in

governments of the Western Hemisphere

US Intervention in Latin America

• USA attempts to thwart election of Peron in 1946

• Popular revolution neutralized by US economic pressure

• CIA organized invasion overthrows Arbenz (1954)

• Nationalist revolution (1959) and alliance with USSR (1960)

US Intervention in Latin America

• Covert intervention by USA against elected Marxist government of Popular Unity (1970-73)

• Military intervention by USA against elected Marxist government of popular unity

• Evolution (1979)USA funds counter revolutionary movement (1980s)

• Covert intervention by USA to defeat left wing guerrillas (1980 – 88)

US Intervention in Latin America

• US invasion to restore stable government (1983)

• US invasion to arrest President Noriega on charge of drug trafficking (1989)

• Negotiated US invasion to restore democracy (1994)

• North American Free Trade Agreement (NAFTA: !994)

Geography and Global Markets Study of geography is important in the

evaluation of markets Need to be knowledgeable about the effects

of geographic diversity on the economic profiles of various nations

Climate and topography are examined as facets of the broader and more important elements of geography

Climate and Topography

Knowledge 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

Climatic features affect uses and functions of products and equipment

Social Responsibility & Environmental Management

Firms required to be socially responsible especially in foreign markets

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

Economic development and protection for the environment can coexist

Sustainable development guides many governments and multinational companies today

Sustainable Development: Key Propositions

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 high

Addressing environmental problems requires that poverty be reduced

Sustainable Development Cont.

Economic growth must be guided by prices that incorporate environmental values

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

Natural Resources Importance of natural resources

especially to manufacturing of products Supply of natural resources not endless Human labor provides the

preponderance of energy in many countries

Importance of oil and gas in world energy consumption

Global Population TrendsPeople constitute markets for various categories 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