Chapter 5: How Managers Use Balance of Payments Data – p.213 Do some research on the items in the table below and see if you see a pattern with the various country’s economies: 1. What is the G7? 2. What is the E7? G7 Countries Continent where the country lies GDP Ease of Doing Business 1. 2. 3. 4. 5. 6. 7. NOTE: When you find the GDP (Gross National Product) note the year – you may not have 2018 statistics. That is okay –find the latest data available. You may need to search for the Ranking of Ease of Doing Business – and then find the countries that make up the G7 or the E7. NEXT PAGE! E7 Countries Continent where the country lies GDP Ease of Doing Business 1. 2. 3. 4. 5. 6. 7. A. Compare the 2 groups of countries – explain your findings. Globalization Effects on Country Institutions, People and Business Chapter 3 Key Points for the Chapter Economic development comprises positive economic growth and entails changes in a country’s political, economic, and cultural institutions, as well as in individual values, attitudes, and behaviors. Economic development requires resources from public and private sectors, both internal and external. Technology transfers by international corporations comprise manufacturing technologies, management organizations, and marketing know-how. Intro: The Economic Development Process Economic development is the progress countries make in living standards as they experience positive economic growth and the changes occurring in societal and cultural institutions and values as nations move toward more advanced stages of industrialization. Economic progress demonstrates human progress, and more pragmatically, it keeps politicians in power, companies busy, and consumers (and voters) optimistic about the future. Technology Transfers International trade, investments, and global media have opened world markets up to a variety of modernizing influences. In general terms, technology transfers occur as corporations enter new markets with products, technologies, lifestyles, and business methods developed in their home and other international markets. Technology transfers first affect urban segments of developing countries where there are developed infrastructures and pocket of economically significant customers. As media become commercialization and distribution channels are built into rural areas, greater proportions of developing-country populations come into contact with modernization influences. 4 Positive Effects Positive effects occur as societies are exposed to broad varieties of products that make lives easier. Convenience products such as packaged foods, and consumer durables such as refrigerators, radios, televisions, and stoves have positive effects on consumer lifestyles. New technologies in manufacturing and distribution make products cheaper and more widely available. They provide employment opportunities for lo.

1. Chapter 5: How Managers Use Balance of Payments Data –
p.213
Do some research on the items in the table below and see if you
see a pattern with the various country’s economies:
1. What is the G7?
2. What is the E7?
G7 Countries
Continent where the country lies
GDP
Ease of Doing Business
1.
2.
3.
4.
5.
6.

2. 7.
NOTE: When you find the GDP (Gross National Product) note
the year – you may not have 2018 statistics. That is okay –find
the latest data available. You may need to search for the
Ranking of Ease of Doing Business – and then find the
countries that make up the G7 or the E7.
NEXT PAGE!
E7 Countries
Continent where the country lies
GDP
Ease of Doing Business
1.
2.
3.
4.

3. 5.
6.
7.
A. Compare the 2 groups of countries – explain your findings.
Globalization Effects on Country Institutions, People and
Business
Chapter 3
Key Points for the Chapter
Economic development comprises positive economic growth and
entails changes in a country’s political, economic, and cultural
institutions, as well as in individual values, attitudes, and
behaviors.
Economic development requires resources from public and
private sectors, both internal and external.
Technology transfers by international corporations comprise
manufacturing technologies, management organizations, and
marketing know-how.

4. Intro: The Economic Development Process
Economic development is the progress countries make in living
standards as they experience positive economic growth and the
changes occurring in societal and cultural institutions and
values as nations move toward more advanced stages of
industrialization.
Economic progress demonstrates human progress, and more
pragmatically, it keeps politicians in power, companies busy,
and consumers (and voters) optimistic about the future.
Technology Transfers
International trade, investments, and global media have opened
world markets up to a variety of modernizing influences.
In general terms, technology transfers occur as corporations
enter new markets with products, technologies, lifestyles, and
business methods developed in their home and other
international markets.
Technology transfers first affect urban segments of developing
countries where there are developed infrastructures and pocket
of economically significant customers.
As media become commercialization and distribution channels
are built into rural areas, greater proportions of developing-
country populations come into contact with modernization
influences.
4
Positive Effects
Positive effects occur as societies are exposed to broad varieties
of products that make lives easier.

5. Convenience products such as packaged foods, and consumer
durables such as refrigerators, radios, televisions, and stoves
have positive effects on consumer lifestyles.
New technologies in manufacturing and distribution make
products cheaper and more widely available. They provide
employment opportunities for local populations.
Not All Have Positive Effects…
Not all technology transfers have positive effects.
In the short term, modern products are only accessible to the
affluent elites.
Commercial advertising also stimulates demand among poor
consumers, causing frustration.
Increased competition in local marketplaces causes dislocations
as indigenous companies find themselves unable to compete
against international competitors, and local workers are
disadvantaged because of their lack of education and workplace
skills.
How People Change in Industrialized Societies
Many societies have been exposed to new technologies, and
modernizing influences, but NOT all have been able to sustain
their development efforts.
One key to sustaining development is the emulation cycle:
The process begins with individuals recognizing the limitations
of traditional societies where birthright and seniority determine
social positions.
As workers find jobs, they take on an industrial work ethic and
their wages allow new consumption habits to form.
As time passes, their commitment to the industrial society
increases.
Migration to towns, young workers join industrializing society

6. 1. Industrializing society uses
6. Work hard to emulate of consumption patterns of social
superiors
“Demonstration Effect” Exposure to new products, media,
lifestyles
2. Work becomes “means to the end” work ethic cultivated
5. Commitment to industrial society increases
Wages allow new consumption patterns to form and
Materialistic behavior takes hold
Sustaining Economic Growth: The Emulation Cycle “Rat Race”
8
Developmental Effects on Industry Behaviors
National trade policies affect company abilities to import vital
machinery, equipment, components, and raw material supplies.
This can be problematic in developing markets as governments
restrict imports to conserve foreign exchange or to manage their
trade balances.
Local labor costs and availability affect industry development
and cost structures.
Demand factors affect industry growth rates and patterns.
Obstacles to Economic Development
Industrialization Process Impediments:
Population migration problems
Worker frustration
Worker adjustment problems
Geographic Impediments:
Resources impediments
Geographic locations
Ethnic and Linguistic Composition
Institutional Resistance to Change

7. Globalization and Worldwide Infrastructure Development
Chapter 2
Key Points
World economic progress has been greatly facilitated by public
and private infrastructure development. The United Nations,
via agencies such as the ICAO, IMO, IMF, WTO and the World
Bank, has laid many of the foundations for world trade through
its effects on transportation, currency exchanges, and
developing country infrastructures.
Private sector contributions to world infrastructures include
more efficient transportation, global media and
communications, and worldwide distribution services.
Economic and political integration has occurred as countries
have joined together in trade blocs to access each other’s
markets and products.
The advent of market forces capitalism worldwide has prompted
national governments to private state-owned industries and
deregulate others to make them more efficient and responsive to
the marketplace.
This Chapter…
The beginning of this chapter describes How the UN contributes
to world infrastructure development. The description of many
of the agencies helping developed as well as developing
countries are explained.
It also explains financial infrastructures and their role in
establishing foreign exchange rate values and gives a historical
perspective.

8. Although very interesting content, in our shorten
semester/course, you may skip this reading and begin on page
58. Next slide –
Free Trade – Protectionism Debate
Free Trade – Protectionism Debate
Pro-free trade arguments include:
Free trade promotes global competition, which benefits
consumers through increased varieties of products and lower
prices.
The economic interdependencies of trade and global commerce
make countries less likely to go to war.
The uneven distribution of global resources, particularly in
commodities, makes trade inevitable.
Trade helps emerging economies develop through technology
transfers.
World trade encouraging efficient use of global resources.
Global competition forces companies to become more efficient
and innovative.
Trade as a source of global education has made countries and
peoples increasingly aware of world events and problems.
Exporting creates jobs.
Free trade has very much become associated with world
development.
Countries specialize and export those goods in which they have
comparative advantages, and they import products that they
produce less effectively than other nations.
Competition forces countries to focus on industries in which
they are competitive.
4

9. Free Trade Debate - Continued
Protectionist/anti-free trade arguments tend to be country or
industry focused and include:
Job loss- global competition through imports causes
unemployment in national economies.
Low developing-country wage rates represent unfair
competition. Industrialized countries argue that emergent-
nation wage rates are too low.
Infant industry argument. Start-up industries often need time to
build up experience and scale economies before being exposed
to international competition.
Strategic industry arguments. There are some industries that
governments label “strategic” and that are sheltered from
international competition.
Uneven playing fields – Some countries are alleged to practice
“managed trade policies,” whereby governments effectively
shield domestic producers.
Managed trade accounts. Countries often restrict trade to a
level where export earnings in convertible currencies cover
import bills.
Free trade and economic restructuring.
Cultural protectionism.
Developing countries have actively lobbied against low-wage
arguments at the WTO, claiming that their cheap labor is a
legitimate competitive advantage.
Free trade has significant repercussions as resources are moved
out of uncompetitive sectors into industries with secure long-
term prospects.
5
Internet Effects on Global Commerce
Global e-commerce generated close to $4 trillion in 2004, with

10. business-to-business dominating business-to-consumer
purchases by a 2 to 1 margin.
Worldwide websites are expected to be a major facilitators of
global trade.
Current product lines and brochures can be promoted.
Sales orders and inquires can be received 24 hours a day.
Communications are less affected by time differences.
Satellite technology has made global communications a reality.
Recent advances have greatly expanded the variety, availability,
and potential uses for satellite technology, whose costs have
decreased with mass-market usage.
Global media developments proliferated over the 19902 and into
the new millennium. Global television has become a reality.
Types of Trade Blocs
Free trade areas are first established to abolish internal tariffs
among member nations while maintaining their own external
tariffs against nonmembers.
Customs unions not only eliminate internal tariffs among
member states but also instigate common externa tariffs.
Common markets have no internal tariffs, a common external
tariff, and free movements of labor and capital among member
countries.
Full economic integration brings member nations closer to
single-market status as non-tariff barriers such as national
product standards, labeling and product testing requirements are
harmonized.
Political integration is the final stage and involves member
states sacrificing national economic and political sovereignty to
integrate fiscal, monetary policies and institute a common
currency to replace national currencies.
Formation of Economic/Political Blocs
The remaining chapter is details the various Economic and

11. Political blocs that have been formed over the years.
Although very interesting – read this section only if you have
time.
Chapter Review Questions
Chapter 1 No. 2. Review the content on p. 28-30 – Explain the
argument for standardize strategies and localized strategies.
Chapter 2 No. 1 – review the Protectionist/anti-free trade
arguments found on page 58-61. Select one of the arguments
and explain your interpretation of the argument and if you feel
it is a worthwhile argument.
Chapter 3 No. 1 -Review the content on page 89 – Explain the
Technology Transfer: Positive and Negative Effects.
WK 1 – Globalization Era Assignment
Chapter 1 No. 1.
Review the content on p. 14 – Modernization, Westernization,
and Americanization. OR if you do not have your textbook yet
– see the Modernization Westernization pdf.

12. AND then review the content of page 37 and 38 on the
Globalization Era OR if you do have your textbook yet – see the
Globalization era pdf below:
Now, Download the Week 1 Globalization Assignment
document and answer the 4 questions. Upload your answers to
Canvas.
1. What do you think the difference between modernization and
Westernization?
2. How do other countries view the USA (positives and
negatives)? How do you think those views were/are formed?
3. How much international business should students have as
part of their business education? Put a percentage on the extent
of international business content and justify it.
4. What is YOUR definition of Globalization?