chap001-globalization n international linkages

7/15/2019 Chap001-Globalization n International Linkages

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Professor H. Michael Boyd, Ph.D.

INTERNATIONAL

MANAGEMENTGLOBAL

Business and PeopleManagement

Professor H. Michael Boyd, Ph.D.


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Brief introductionrolandxavier.com

Name: Assoc. Prof. Dr. Siri Roland Xavier, MMIMAcademic Qualifications: LL.B (Hons) University of London, UK; MBA, Charles Sturt University, Australia [Valedictorian] Doctor Of Business Administration, University of Newcastle,

AustraliaWhat I do: Deputy Dean of the Bank Rakyat School of Business and

Entrepreneurship. Programme Director for Entrepreneurship. National Team Leader of Global Entrepreneurship Monitor.

Board member, Global Entrepreneurship Research Association(GERA). Editorial Board Member, Journal of Global Entrepreneurship

Research (JGER), 2012-2013. Reviewer ofEmerald Emerging Markets Case Studies focusing

on SEA

Lead writer of the Entrepreneurship Global Report, 2012.


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My International Research projects

Global Entrepreneurship Monitor (GEM), National TeamLeader and Principal Researcher, since 2009-2013: TheMalaysian Report. Yearly university grant RM350, 000.

Successful Transgenerational Entrepreneurship Practices(STEP), Team member, since 2009-2013. Yearly grant value

MYR70,000. GEM-International Development Research Centre (IDRC)

South East Asia, Research Project Leader, 2013, Grant valueUSD700,000.

United Nations Economic and Social Commission for Asiaand the Pacific (ESPAC), Project member, MultinationalEnabling Environment for Womens Economic EmpowermentThrough Entrepreneurship, 2012, Grant value MYR45,252.

Total 2013 Research Grants=MYR2,565,252


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International Management

International management involves

Applying management concepts and techniques ina multinational environment and

Adapting management practices to differenteconomic, political, and cultural environments.

Multinational corporation (MNC)

Operations in more than one country International sales

Nationality mix of managers and owners


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The Worlds Top Nonfinancial MNCsRanked by Foreign Assets, 2007


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The Worlds Top Nonfinancial MNCs

from Developing CountriesRanked by Foreign Assets, 2007


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Globalization and Internationalization

GlobalizationProcess of social, political, economic, cultural, and

technological integration among countries aroundthe world.

Hastened byOffshoringProcess by which companies undertake some

activities at offshore locations instead of theircountries of origin.

OutsourcingSubcontracting or contracting out of activities to

external organizations that had previously beenperformed by the firm.


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Map of the World


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The workforce is Global

World Population 2011

The Face of Seven Billion People

On a planet of seven billion peoplethe population in 2011

who is the most typical human?

According to statistics: a 28-year-old Han Chinese male.

The worlds largest age bracket is 28, the largest ethnic group is Han, and with 1.3 billion people, the most populous nation is China.

(By 2030, China will lose its top population status, and the

most typical human face will be Indian.)

The typical human is male only by a whisker: There are1.01 men in the world for every woman.

Other top-ranking traits among the worlds population:

82% are literate 40% work in service; 38% in agriculture; 22% I Industry 51% live in urban environments 33% are Christian; 21% are Muslim; 13% are Hindu 13% speak Mandarin as their first language; 5% Spanish;

5% English

19% are Chinese; 17% are Indian; 4% are American.National Geographic, March 2011

http://web.bentley.edu/hboyd/readings_files/Global/World%20Population%202011.pdf
http://web.bentley.edu/hboyd/readings_files/Global/World%20Population%202011.pdfhttp://web.bentley.edu/hboyd/readings_files/Global/World%20Population%202011.pdfhttp://web.bentley.edu/hboyd/readings_files/Global/World%20Population%202011.pdfhttp://web.bentley.edu/hboyd/readings_files/Global/World%20Population%202011.pdf


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Our World Changes Faster Than we Think!


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The global market may becomethe only place to find skills needed


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Globalization: Pros and Cons

Benefits of GlobalizationWealthJobsTechnology

Lower prices

Criticisms of Globalizationoff-shoring of business service jobs to lower-wage

countriesgrowing trade deficitsslow wage growthenvironmental and social impacts


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Global and Regional Integration

Global AgreementsWorld Trade Organization (WTO)General Agreement on Tariffs and Trade (GATT)

Regional AgreementsNorth American Free Trade Agreement (NAFTA)U.S.-Central American Free Trade Agreement

(CAFTA)

European Union (EU)Association of Southeast Asian Nations (ASEAN)Free Trade Agreement of the Americas (FTAA)


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International Economic Powerin the Global Economy

Shifting landscape due to

Economic integration

Economic potential of emerging markets

BRIC countries (Brazil, Russia, India, and China)could be among the four most dominanteconomies by 2050


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The Worlds Largest Economies 2005 and 2020(Projected)

Measured by GDP at Market Exchange Rates


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The Worlds Largest Economies 2005 and 2020(Projected)

Measured by GDP at Purchasing Power Parity

Ch i D hi D l i


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Changing Demographics: DevelopingCountries on the Rise

(ranked by size)


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Trends in Trade andInternational Investments

International Trade In 2009 merchandise and commercial services

exports declined

Foreign direct investment (FDI)

Investment in property, plant, or equipment inanother countryGrowing at healthy rateOutpacing domestic growth in most countriesDeclined in 2009 due to the global recession

W ld M h di T d b R i


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World Merchandise Trade by Regionand Selected Country, 2009

(in U.S.$ billions or percent)

World Foreign Direct


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World Foreign DirectInvestment Inflows

(in U.S.$ millions)

World Foreign Direct


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World Foreign DirectInvestment Inflows

(in U.S.$ millions)


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Global Economic Systems

Market Economy

Command Economy

Mixed Economy


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Economic Performanceby Major World Region

Established Economies North America European Union Japan

Emerging Economies Central and Eastern Europe China Other Emerging Markets of Asia India

Developing Economies on the Verge South America Middle East and Central AsiaAfrica


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Map of theAmericas


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Economic PerformanceEstablished Economies

North AmericaOne of the four largest trading blocs in the worldCombined purchasing power of U.S., Canada and

Mexico approaches $12 trillion

Free-market-based economy is attractive to privatefirms

United StatesForeign MNCs find U.S. a lucrative expansion marketForeign firms welcomed as investors in U.S. marketU.S. firms hold market dominance in many European

markets; gaining market share in Asia


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CanadaU.S.s largest trading partnerMost of the largest foreign-owned Canadian

companies are totally or heavily U.S.-owned

Legal and business environment in Canada is similarto that in U.S.

MexicoStrongest Latin American economyVery strong maqui ladora industryTrade with both Europe and Asia has increasedNow competitive with Asia for the U.S. market

E i P f


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Economic PerformanceDeveloping Economies on the Verge

South America

Hampered by foreign debt and severe inflation

But, intercountry trade is increasing

Countries looking to do business with U.S.

Brazil

Economy is now flourishing and attracting

investment from MNCsPrivatization and stable government

E i P f


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Chile

Uncertain future, but helped by trade agreements

ArgentinaAbundant natural resources

Economic problems persist


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Map of Europe

E i P f


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European UnionUltimate objective

Eliminate all trade barriers among member countriesEmergence of the EU as an operational economic union

A unified Europe could become the largest economic market interms of purchasing power in the world

Foreign MNCs trying to gain foothold in EUAcquisitions, alliances, cooperative R&D efforts

Economic linkages between the EU and newlyemerging Central and Eastern European countriesChallenge is to absorb former communist bloc countries

Financial crises in Greece and Ireland puttingpressure on the euro

E i P f


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Economic Performance

Established Economies

Japan

Huge economic success in 1970s and 1980s

Ministry of International Trade and Industry

(MITI)Keiretsus

Vertically integrated industries

Holdings provide assistance needed in providing goodsand services to end users

Decade long recession in 1990sMore competition from emerging economies

Poor management decisions

Remains a formidable competitor in the Pacific Rim,

North America, and Europe

E i P f


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Economic PerformanceEmerging Economies

Central and Eastern Europe

Russia

Dismantling of price controls and privatization

Membership in International Monetary Fund(IMF) controlling inflation

Crime and political uncertainty

Czech Republic, Hungary, Poland

Privatization

Inflation

Political uncertainty


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Map of Asia-Pacific



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China

Real economic growth of 12 percent in 2007, 9percent in 2008, and 11.5 percent in 2009

Savings glut in corporate sector

Vast developmental needs

Unemployment concerns

Attractive to investors despite political risk

Product pirating is a major problemCurrency value

Government policies favor domestic firms



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South Korea

Chaebols

Very large family-held conglomerates

Solid economy, moderate growth and inflation, lowunemployment

Hong Kong

Part of Peoples Republic of China

Uncertainty about the role the Chinese government



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Singapore

Success story

Leader and financial center for region

Taiwan

Progressed from labor-intensive economy to onedominated by technologically sophisticated

industriesbanking, electricity generation, petroleum refining and

computers



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Thailand, Malaysia, Indonesia

Large population base

Inexpensive labor

Considerable natural resourcesAttractive to outside investors



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India

Large population

Recent trend of locating software and high value-

added services to this country boosting middle- andupper-class market for goods and services

Attractive to U.S. and British investorswell educated, English speaking, technologically

sophisticated workers


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Map of the Middle East



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Middle East and Central Asia

Large oil reserves

Highly unstable geopolitical and religious forces

Plagued by continuing economic problems


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Map of Africa



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Africa

Considerable natural resources

African nations remain very poor and undeveloped

International trade is not a major sources of income

Populace divided into 3,000 tribes that speak 1,000languages and dialects

Major political instability

Poverty, starvation, illiteracy, corruption,overcrowding among many social problemsnegatively affecting economic sector

Worlds Most


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World s Most

Competitive Nations, 2010

M k t P t ti l I di t R ki f


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Market Potential Indicators Ranking forEmerging Markets, 2009


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Culture

Operating system of the mind

Distinguishes one group from another

Impacts attitudes, beliefs, and behaviorsOften unconscious

Understand to predict behavior

Danger of generalizations

chap001-globalization n international linkages

Documents

entrepreneurship global

research project leader

project member

research grants

team member

yearly university grant

university of newcastle

grant valueusd700