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Meeting_2
- 1. Globalization and International Linkages By: Sarah Bravenec and Katie Norman
- 2. Article – EmergingGiants • Some emerging countries: Brazil, China, India, Russia, Egypt, and South America • What are some advantages and disadvantages companies have by using these countries to make their companies more international?
- 3. International Management • Internationalmanagement? – the process of applying management concepts and techniques in a multinational environment and adapting management practices to different economic, political, and cultural environment • Reshape business models • What is a MNC? Give an example of a MNC company.
- 4. Globalization and Internationalization •Internationalization (process of a business crossing from national to cultural borders) VS. globalization (vision of creating one world unit, a single market entity • Offshoring and outsouring – Who benefits from these two processes of globalization?
- 5. Global and RegionalIntegration • World Trade Organization (WTO) • North American Free Trade Agreement (NAFTA) • CAFTA – DR – U.S. central American free trade agreement – Dominican republic • Free Trade Agreement of the Americas (FTAA) • European Union – 27 member states • Regional Trade agreements have slowed down negotiations between countries in the WTO
- 6. The Shifting Balanceof Economic Power in the Global Economy • In a report, Goldman Sachs argued that the global potential of Brazil, Russia, India, and China is such that they may becoming among the 4 most dominant economies by the year 2050 • Why do you think that these countries have the potential to become the most dominant economies?
- 7. Economic Systems ofthe World and Regional Connections • Global economies • Market economy – when private enterprises own property and monitor the production, distribution of goods, and services while the state simply supports competition and efficient practices • Command economy – the government, has explicit control over the price and supply of a good or service • Mixed economy – a combination of a market and command economy
- 8. North America • Free-market-basedeconomy • Canada is the US’s largest trading partner • Mexico has built a very strong maquiladora (factories) industry • What industries does North America have major dominant positions in?
- 9. South America • Accumulatedheavy foreign debt, and severe inflation • Argentina has one of the strongest economies overall – abundant natural resources – literate population – export-oriented agricultural sector – diversified industrial base • Positive dev. in SA is the growth of intercountry trade, spurred on by the progress toward free- market policies
- 10. Europe • EU – Ultimate objective of the EU is to eliminate all trade barriers among member countries (like b/w states in the US) – Single currency and a regional central bank • Central and Eastern Europe – Russia: dismantling of Russian price controls, and privatization of ownership – Poland – economy has done relatively well, first of communist-bloc countries to adopt more privatized ownership
- 11. Asia • Japan – Japanese cultural values – Ministry of International Trade and Industry (MITI) – Use of keiretsus (a large group of vertically integrated companies to end users) • China – Major risk, tense trade feelings, because of the two systems of communism and capitalism • Emerging markets – South Korea: chaebols – Hong Kong – headquarters for some of the most successful multinational operations in Asia – Singapore: ideal model of urban life, leader and financial center of Southeast Asia – Taiwan – progressed from labor intensive economy to one that is dominated by more technology
- 12. Other Emerging Countries •Less Developed Countries (LDC) – What characterizes an LDC? • India – Recent trend of of locating software and other higher- value-added services • Middle East and Central Asia – Many are considered LDC’s, but because of oil they are considered economically rich • Africa – Considerable natural resources, but remains poor and underdeveloped – developing nations in Africa lack the institutions, infrastructure, and economic capacity to take full advantage of globalization
Editor's Notes
- #4 GE, Tata Group (India), Royal Dutch/Shell Group, Cisco Systems
- #5 http://www.youtube.com/watch?v=3oTLyPPrZE42:05, 3:30, 5:40Benefits for companies: entry into different countries, increased global sales, cheaper labor and costsBenefits for workers: those in countries being industrialized get jobs, gain wagesCosts for workers: loss of jobs to people who will take lower wagesBenefits for communities: it can increase jobs, therefore reducing povertyCost for communities: can take jobs away from people, increasing unemployment
- #6 http://rendezvous.blogs.nytimes.com/2012/02/06/greece-between-default-and-the-explosion-of-revolution/?scp=2&sq=European%20Union,%20globalization&st=cseeconomic doom for Greece and renewed speculation about the life expectancy of the euro. That renewed uncertainty could, in turn, affect not just Europe (spreading “contagion” to Portugal, Spain and Italy), but also the global economy, including China (Europe is its biggest market) and the United States, where a nascent recovery shows signs of strengthening — for now.
- #7 http://www.nytimes.com/2012/01/23/business/global/wrenching-the-globe-into-a-new-economic-orbit.html?scp=2&sq=BRIC&st=cseSome See Two New Gilded Ages, Raising Global TensionsToday, as the world economy is being reshaped by the technology revolution and globalization, the resulting economic transformation is creating a new gilded age and a new plutocracy. The West is experiencing a second gilded age, while the emerging markets, as Mr. O’Neill and others have documented, are experiencing their first gilded age. “We are seeing much more rapid growth in developing countries, especially China and India, because the policies and technologies in the West have allowed a lot of medium-skilled jobs to be done” in those countries…A survey of about 10,000 Harvard Business School alumni released last week illustrated this gap. The respondents were very worried about U.S. competitiveness in the world economy — 71 percent expect it to decline over the next three years
- #9 http://search.proquest.com.ezproxy.baylor.edu/wallstreetjournal/docview/919895164/134BAA53BC52F1D13F4/1?accountid=7014It is no wonder the price of imports from China, flat for many years, has been rising since late 2010. The changing cost dynamics have boosted hopeful talk that U.S. manufacturers will turn to "in-sourcing," and it is true some companies are moving operations back home. But for many companies, a better step is to beef up production in Mexico-Foreign money is being invested into U.S. manufacturing because some countries that were previously very popular to invest in (China) have had rising costs… It is now as cheap to manufacture and do business in the U.S. (link to article about China, U.S., and Mexico)Based on that information, and the idea that all the best U.S. acquisitions are already invested in, the Wadson Company should invest in companies in Europe that are expanding or will be expanding into the United States.
- #10 South America is a great place to invest because there is a lot of growth, and ease of trade between those nations.
- #11 -Russia has a very large, untapped population/market, and it also has a promising future rise in GDP as it continues to develop, post-communism. Other Eastern European countries have unemployed, skilled workers that can be tapped.-Europe is likely a good place for foreign investment as the EU continues to expand. (link to article about Greece and Croatia). If the conglomerate is not currently doing business in Europe, it may be difficult to enter the market. Right now, the EU is more uncertain than it has been, so entry right now may be more difficult than it would have been before the global financial crisis
- #12 http://www.nytimes.com/2009/12/21/world/asia/21china.html?pagewanted=2China’s Export of Labor Faces Scorn China, famous for its export of cheap goods, is increasingly known for shipping out cheap labor. These global migrants often work in factories or on Chinese-run construction and engineering projects, though the range of jobs is astonishing: from planting flowers in the Netherlands to doing secretarial tasks in Singapore to herding cows in Mongolia — even delivering newspapers in the Middle East. But a backlash against them has grown-Asia is intriguing for MNCs because of the huge market and availability of workers, especially in China, as well as growing GDP. Also, some of the business practices in Asia help cultivate success, like the Japanese keiretsus and the South Korean chaebols (large family-held conglomerates that have political and economic power).
- #13 Why are MNCs interested? India is attractive because it has a large population, consisting of highly educated, English speaking people, and also because the government is funding economic development. The Middle East has oil that the majority of the world relies on, so all businesses must have interest there. Africa is untapped, but there are so many resources that it is not smart to leave it that way. Overall, these markets are those of the future, so MNCs need to put their focuses here because this is what will be growing in the future.