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Chapter 1: Globalization (Globalization of Products (Companies can (–…
Chapter 1: Globalization
Globalization of Market (Causes)
falling trade barriers make it easier to sell globally
consumers’ tastes and preferences are converging on some
global norm
firms promote the trend by offering the same basic
products worldwide
Is An Interdependent Global Economy
A Good Thing?
Supporters believe that increased trade and cross- border investment mean
lower prices for goods and services
– greater economic growth
– higher consumer income, and more jobs
Critics worry that globalization will cause
job losses
– environmental degradation
– the cultural imperialism of global media and MNEs
Globalization of Products
Firms source goods and services from locations
around the globe to capitalize on national
differences in the cost and quality of factors of
production like land, labor, energy, and capital
Companies can
– lower their overall cost structure
– improve the quality or functionality of their product offering
eg. outsourcing
How Does Globalization Affect Jobs
And Income?
Critics argue that falling barriers to trade are destroying manufacturing jobs in advanced countries
Supporters contend that the benefits of this trend outweigh the costs
– countries will specialize in what they do most efficiently and trade for other goods—and all countries will benefit
How Does The Global Marketplace
Affect Managers?
Managing an international business differs from
managing a domestic business because
-countries are different
– the range of problems confronted in an international business is wider and the problems more complex than those in a domestic business
– firms have to find ways to work within the limits imposed by government intervention in the international trade and investment system
– international transactions involve converting money into different currencies