Bài giảng Global Business Today - Chapter 1 Globalization

Global Business Today 8eby Charles W.L. HillChapter 1 GlobalizationWhat Is Globalization?Question: What is globalization? Globalization - the trend towards a more integrated global economic systemGlobalization of markets - the merging of historically distinct and separate national markets into one huge global marketplaceGlobalization 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) The Emergence of Global InstitutionsGlobal institutions:Manage, regulate, and police the global market placePromote the establishment of multinational treaties to govern the global business systemNotable global institutions include the:World Trade Organization (WTO) International Monetary Fund (IMF)World Bank United Nations (UN)Drivers of GlobalizationQuestion: What is driving the move toward greater globalization? Two macro factors: Declining trade and investment barriersTechnological change International trade occurs when a firm exports goods or services to consumers in another countryForeign direct investment (FDI) occurs when a firm invests resources in business activities outside its home countryDrivers of GlobalizationAverage Annual Percentage Growth in Volume of Exports and World GDP, 1950-2010 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 pictureThe 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 businessToday, much of this has changedChanging World Output  and World Trade PictureThe Changing Demographics of World GDP and Trade Changing Foreign Direct InvestmentQuestion: 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 1960sThe stock of foreign direct investment (total cumulative value of foreign investments) generated by rich industrial countries is decliningCross-border flows of foreign direct investment are risingThe largest recipient of FDI is China Changing FDI PicturePercentage Share of Total FDI Stock, 1980 - 2010 Changing FDI PictureFDI Inflows, 1988 - 2010 The Changing Multinational EnterpriseQuestion: What is a multinational enterprise?A multinational enterprise is any business that has productive activities in two or more countriesSince the 1960s: There has been a rise in non-U.S. multinationalsThere has been a rise in mini-multinationals The Changing World OrderQuestion: Why is the changing world order important for firms? The collapse of communism in Eastern EuropeNew export and investment opportunitiesEconomic development in ChinaHuge opportunities despite continued Communist controlFree market reforms and democracy in Latin AmericaNew markets and new sources of materials and production The Global Economy in the 21st CenturyQuestion: 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 disarrayThe Globalization DebateQuestion: 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 servicesOthers feel that globalization is not beneficial 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 Managing in the Global MarketplaceCountry differences require companies to vary their practices country by countryManagers face a greater and more complex range of problemsInternational companies must work within the limits imposed by governmental intervention and the global trading systemInternational transactions require converting funds and being susceptible to exchange rate changes