International BusinessInternational BusinessChapter OneChapter One

Globalization and Globalization and International BusinessInternational Business

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Globalization DefinedGlobalization Defined Globalization: Globalization: the ongoing social, economic, the ongoing social, economic,

and political process that deepens and and political process that deepens and broadens the relationships and inter-broadens the relationships and inter-dependencies amongst nations—their dependencies amongst nations—their people, their firms, their organizations, and people, their firms, their organizations, and their governmentstheir governments

International business facilitates globalization International business facilitates globalization processprocess

Four Dimension of Globalization Index are: Four Dimension of Globalization Index are: Economic, Technological, Personal Contact, and Economic, Technological, Personal Contact, and Political Political

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International Business DefinedInternational Business Defined

International business: International business: all commercial all commercial transactions between parties in two or transactions between parties in two or more countriesmore countries• Private firms are profit-oriented.Private firms are profit-oriented.• Government organizations may or may Government organizations may or may

not be profit-oriented.not be profit-oriented.• The international business environment The international business environment

is more complex and diverse than the is more complex and diverse than the domestic business environment.domestic business environment.

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Factors in International Business Factors in International Business OperationsOperations

Figure shows the organization of materials in the text.Figure shows the organization of materials in the text.

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The Forces Driving GlobalizationThe Forces Driving Globalization

1.1. Increased in and expansion of Increased in and expansion of technologytechnology

2.2. Liberalization of cross-border trade and Liberalization of cross-border trade and resource movementsresource movements

3.3. Development of services that support Development of services that support international businessinternational business

4.4. Growing consumer pressuresGrowing consumer pressures5.5. Increased global competitionIncreased global competition6.6. Changing political situationsChanging political situations7.7. Expanded cross-national cooperationExpanded cross-national cooperation

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Criticisms of GlobalizationCriticisms of Globalization

Threats to national sovereigntyThreats to national sovereignty Economic growth and environmental Economic growth and environmental

stressstress Growing income inequality and Growing income inequality and

personal stresspersonal stress

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Why International Business Differs Why International Business Differs from Domestic Businessfrom Domestic Business

Political and legal practicesPolitical and legal practices Cultural factorsCultural factors Economic forcesEconomic forces Geographic influencesGeographic influences Competitive factorsCompetitive factors

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International Business As A International Business As A Discipline for ManagersDiscipline for Managers

Integrative disciplineIntegrative discipline borrowing from borrowing from Domestic and International Law, Domestic and International Law, Political Science, Anthropology, Political Science, Anthropology, Sociology, Psychology, Economics, Sociology, Psychology, Economics, Geography and BusinessGeography and Business

Managers must have an Managers must have an International International MindsetMindset to succeed in global markets to succeed in global markets

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Global GovernanceGlobal Governance Politics/Peace- Politics/Peace- United NationsUnited Nations Trade-Trade- World Trade Organization (WTO) World Trade Organization (WTO) Money/Finance-Money/Finance- International Monetary Fund International Monetary Fund

(IMF)(IMF) Development- Development- World BankWorld Bank Overall-Overall- G8 Nations (USA, Canada, UK, France, G8 Nations (USA, Canada, UK, France,

Germany, Italy, Japan, and Russia)Germany, Italy, Japan, and Russia) Other international organizations and bodiesOther international organizations and bodies

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Chapter 1: Discussion QuestionsChapter 1: Discussion Questions

1.1. Define globalization and explain the forces Define globalization and explain the forces driving globalization.driving globalization.

2.2. Define International Business. How does it differ Define International Business. How does it differ from domestic business?from domestic business?

3.3. What is global governance? Explain the role What is global governance? Explain the role that each institution plays in Global that each institution plays in Global Governance.Governance.