INTRODUCTION TO THE COURSE

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INTRODUCTION TO THE COURSE
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Globalization
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Global Telecommunications
1-1
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SOME IMPORTANT TRENDS

• GLOBALIZATION OF WORLD ECONOMY
• CHANGING NATURE OF INTERNATIONAL BUSINESS
• WHY INTERNATIONAL BUSINESS IS DIFFERENT

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Global Drivers
Positive
Negative
Technology Open Markets Economic
Integration Peace Corporate Strategy Global Focus
Culture Market Barriers National Barriers
War Corporate Strategy Local Focus
1-3
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Globalization of Markets
1-4
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Global Production
Swan Optical
Manufacturing
Design
1-5
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Growth of World Trade and World Output
1950100
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Impact of GATT Tariff Rates
Average Tariff Rates on Manufactured Products
of Value
Table 1.1
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The Shrinking Globe
1500 -1840
1850 - 1930
1950s
1960s
Jet passenger aircraft, 500 - 700 mph.
Propeller aircraft 300 - 400 mph.
Steam locomotives average 65 mph. Steamships
average 36 mph.
Best average speed of horse-drawn coaches and
sailing ships, 10 mph.
Figure 1.2
Source P. Dicken, Global Shift (New York
Guillford Press, 1992) p. 104.
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THE CHANGING NATURE OF INTERNATIONAL BUSINESS
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The Changing Pattern of World Output and Trade
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(No Transcript)
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Percentage Share of Total FDI Stock 1980-2001
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FDI Inflows1985-2001
B
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Globalization - Pro

• Lower prices for goods and services.
• Economic growth stimulation.
• Increase in consumer income.
• Creates jobs.
• Countries specialize in production of goods and
  services that are produced most efficiently.

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Globalization - Con

• Destroys manufacturing jobs in wealthy, advanced
  countries.
• Wage rates of unskilled workers in advanced
  countries declines.
• Companies move to countries with fewer labor and
  environment regulations.
• Loss of sovereignty.

1-14
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Sovereignty and the WTO
Under the new system, many decisions that affect
billions of people are no longer made by local or
national governments but instead, if challenged
by any WTO member nation, would be deferred to a
group of unelected bureaucrats sitting behind
closed doors in Geneva. -Ralph Nader-
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WHY INTERNATIONAL BUSINESS IS DIFFERENT

• DIFFERENT CULTURES, POLITICAL SYSTEMS, ECONOMIC
  SYSTEMS, LEGAL SYSTEMS, THEY ARE AT DIFFERENT
  STAGES OF ECONOMIC DEVELOPMENT.
• GREAT COMPLEXITY OF MANAGING IN INTERNATIONAL
  BUSINESS
• MUST WORK WITH DIFFERENT GOVERNMENTS
• DEAL IN DIFFERENT CURRENCIES

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FOCUS OF THE COURSE

• International Management Issues
• Relevant environments for the firm
• Cross-cultural management
• International strategic management
• Organizational behavior human resource
  management

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ASPECTS OF THE COURSE
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The Structure of Hodgetts Luthans Text
Environmental Foundations, chapters 1-4
The Role of Culture, chapters 5-8
International Strategic Management, chapters 9-12
Organizational Behavior Human Resource
Management, chapters 13-17
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COURSE ACTIVITIES

• CASE ANALYSIS (35)
• 1 group 1 individual
• CLASSES HEAVILY PARTICIPATIVE -- cases,
  exercises, written work -- participation (25)
• 2 EXAMS (40)

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COVERAGE ON 15/1/2002

• TOPIC Worldwide Developments
• VIDEO on Euro
• READ MINICASES on pp. 27-28
• DO INTERNET EXERCISE half surfing web for
  Canadian statistics other half on franchise
  opportunities at McDonalds