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Chapter 14

Globalization and Business

Book Version 10
By Boundless
Boundless Management
Management
by Boundless
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Section 1
Globalization
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Defining Globalization

Globalization is the process by which the international exchange of goods, services, capital, technology and knowledge becomes increasingly interconnected.

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Benefits of Globalization

Globalization has lead to valuable, world-wide cross-cultural understanding and the fruitful exchange of products and ideas.

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Complications of Globalization

The increasing rate of global economic and cultural exchange has resulted in a variety of developmental challenges.

Section 2
Historical Developments in the Global Economy
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Major Historical Developments in the Global Economy

The development of a global economy includes important highlights to understand when considering its current framework.

Section 3
International Trade Barriers
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Economics

Trade barriers are government-induced restrictions on international trade, which generally decrease overall economic efficiency.

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Ethical Barriers

Despite international trading laws and declarations, countries continue to face challenges around ethical trading and business practices.

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Cultural Barriers

It is typically more difficult to do business in a foreign country than in one's home country due to cultural barriers.

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Technological Barriers

Standards-related trade measures, known in WTO parlance as technical barriers to trade play a critical role in shaping global trade.

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The Argument for Barriers

Some argue that imports from countries with low wages has put downward pressure on the wages of Americans and therefore we should have trade barriers.

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The Argument Against Barriers

Economists generally agree that trade barriers are detrimental and decrease overall economic efficiency.

Section 4
International Trade Agreements & Organizations
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Common Markets

A common market is the first stage towards a single market and may be limited initially to a free trade area.

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The Export-Import Bank of the United States

The Export-Import Bank of the United States (Ex-Im Bank) is the official export credit agency of the United States federal government.

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The International Monetary Fund (IMF)

The IMF seeks to promote international economic cooperation, international trade, employment, and exchange rate stability.

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The North American Free Trade Agreement (NAFTA)

NAFTA is an agreement signed by Canada, Mexico, and the United States, creating a trilateral trade bloc in North America.

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The World Bank

The World Bank is an international financial institution that provides loans to developing countries for various programs.

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The European Union

The European Union (EU) is an economic and political union made up of 27 member states that are located primarily in Europe.

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The Asia-Pacific Economic Cooperation

APEC is a forum for 21 Pacific Rim countries that seeks to promote free trade and economic cooperation throughout the Asia-Pacific region.

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The General Agreement on Tariffs and Trade (GATT)

The General Agreement on Tariffs and Trade (GATT) is a multilateral agreement regulating international trade.

Section 5
Types of International Business
Countertrade

Countertrade is a system of exchange in which goods and services are used as payment rather than money.

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Direct Investment

FDI is practiced by companies in order to benefit from cheaper labor costs, tax exemptions, and other privileges in that foreign country.

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Franchising

Franchising enables organizations a low cost and localized strategy to expanding to international markets, while offering local entrepreneurs the opportunity to run an established business.

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Multinational Firms

With the advent of improved communication and technology, corporations have been able to expand into multiple countries.

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Offshoring

Offshoring entails a company moving a business process from one country to another.

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Joint Ventures

In a joint venture business model, two or more parties agree to invest time, equity, and effort for the development of a new shared project.

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Outsourcing

Outsourcing business functions to developing foreign countries has become a popular way for companies to reduce cost.

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Importing

Imports are the inflow of goods and services into a country's market for consumption.

Licensing

When considering strategic entry into an international market, licensing is a low-risk and relatively fast foreign market entry tactic.

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Contract Manufacturing

In contract manufacturing, a hiring firm makes an agreement with the contract manufacturer to produce and ship the hiring firm's goods.

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Exporting

Exporting is the practice of shipping goods from the domestic country to a foreign country.

Section 6
The Global Corporation
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Definition and Challenges of a Global Corporation

Global corporations operate in two or more countries and face many challenges in their quest to capture value in the global market.

Section 7
Managing International Corporations
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Considerations when Managing a Global Corporation

Strong global management skills, intercultural competence, and a sensitivity to cultural issues are necessities for global managers.

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Boundless Management by Boundless
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Ethics in Business
  • Ethics, an Overview
  • Business Stakeholders
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Chapter 14
Globalization and Business
  • Globalization
  • Historical Developments in the Global Economy
  • International Trade Barriers
  • International Trade Agreements & Organizations
  • Types of International Business
and 2 more sections...
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Chapter 15
Diversity in a Global Business World
  • Diversity in Organizations
  • Creating a Diverse Workforce
  • Challenges to Achieving Diversity
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