INTERNATIONAL BUSINESS And GLOBALIZATION
INTERNATIONAL BUSINESS andGLOBALIZATIONDr. Bett MickelsWorldWideTeams ConsultingHsiuping Universityof Science and TechnologyOctober, 2013
International Business andGlobalization Agenda GlobalizationcharacteristicsGlobalization advantagesand disadvantagesGlobalization stagesInternational trade theoriesInternational country riskTaiwan globalizationMNC ”good and the bad”October, 2013worldwideteams.com
DefinitionsInternational BusinessBusiness (firm) that engages in international (cross-border)economic activities or the action of doing business abroad(Peng, 2013)Global BusinessBusiness around the globe including both international(cross-border) activities and domestic business activities(Peng, 2013)October, 2013worldwideteams.com
What is Globalization?Hill defines globalization as "The shift towardsa more integrated and interdependent worldeconomy” (Hill, 2007).Globalization has two main components: Globalization of markets Globalization of productionOctober, 2013worldwideteams.com
What is Globalization?“Economic "globalization" is a historical process, the resultof human innovation and technological progress. It refers tothe increasing integration of economies around the world,particularly through the movement of goods, services, andcapital across borders. The term sometimes also refers to themovement of people (labor) and knowledge (technology)across international borders. There are also broader cultural,political, and environmental dimensions of globalization.”(International Monetary Fund, n.d.)October, 2013worldwideteams.com
GlobalizationGlobalization integrates economies and societies. Theglobalization process includes: Globalization of markets Globalization of production Globalization of technology Globalization of investmentOctober, 2013worldwideteams.com
China – Going Global Videohttp://www.youtube.com/watch?v nnGeSPmPAK4October, 2013worldwideteams.com
Characteristics of Globalization Domestic & foreign market differences disappearExpand business activities worldwideBuying and selling goods to any country in the worldCompanies consider entire world as a marketResources can be obtained from entire worldStrategies are based on global approachRapid increase in interdependence between differentcountriesOctober, 2013worldwideteams.com
Characteristics of Globalization Customers tend to get highest value for moneyPromotes formation of trade blocksFocus is shifting from the bureaucrat to business savvyRapid increase in mobility of resourcesRemoves international trade barriers.Drives out inefficient companiesProvides tremendous scope for sound companiesOctober, 2013worldwideteams.com
Advantages of Globalization (Lambin, 2001)Customers hold more powerLess developed countries access international marketsBrands grow worldwideEmergence of transnational market segmentsGrowing power of large international distributorsAdoption of socio-ecological view of consumptionEmergence of a global economyDevelopment of good corporate citizenship behaviorOctober, 2013worldwideteams.com
Disadvantages of Globalization Domestic business may be ignoredCould exploit human resourcesMay lead to unemployment and under-employmentDecline in demand for domestic productsMay result into decrease in domestic incomeMay result into exploitation of natural resources inunder-developed countriesUnethical business tactics – briberyMay result into commercial and political colonizationOctober, 2013worldwideteams.com
Doing Business in Taiwan Videohttp://www.youtube.com/watch?v rSApRs5NqmwOctober, 2013worldwideteams.com
Group Discussion What globalization advantages are seen inTaiwan? What globalization disadvantages are seen inTaiwan?October, 2013worldwideteams.com
Globalization StagesStage 1 – Domestic CompanyStage 2 – International CompanyStage 3 – Multinational Company(MNC)Stage 4 – Global Company (globalstrategy and approach)Stage 5 – Transnational Company (globalresources serve global markets)October, 2013worldwideteams.com
International Business Theories Adam Smith's Theory of International Trade Ricardian Theory of International Trade Hecksher Ohlin Theory of International TradeOctober, 2013worldwideteams.com
Adam Smith TheoryAdam Smith favored free trade which has theadvantages of division of labor and specializationboth at the national and international levelsOctober, 2013worldwideteams.com
Ricardian TheoryThe economist David Ricardo in his book" Principles ofPolitical Economy and Taxation" systematicallyrepresented the Comparative Cost Theory.Countries can gain from trade if they had an absoluteadvantage as put forward by Adam Smith but also if they hada comparative advantage in production. (Ricardo, 2006)October, 2013worldwideteams.com
Hecksher Ohlin TheoryHecksher Ohlin’s International Trade Theoryessentially says that countries will export productsthat use their abundant and cheap factor(s) ofproduction and import products that use thecountries' scarce factor(s).October, 2013worldwideteams.com
Country Risk Analysis (Bhalla, 2008)Political FactorsSocial – Cultural FactorsEconomical FactorsEthical practicesHofstede ModelOctober, 2013worldwideteams.com
Political Risk Factors Political party in powerOpposition partiesThe government systemConflict arising from outside the country due to country'sown problems or due to treaty or other complicationsRelations with major trading partnersRelations of the company's home countryOctober, 2013worldwideteams.com
Socio-Cultural Risk Factors Social groups, history of class structureEthnic, religious, linguisticExtent of cohesiveness or divisivenessGeneral psychology of population.Unemployment, recession, strikes, lockoutsExtent of social unrestCross border ties, cross border threatsRapid increase in costs of productionOctober, 2013worldwideteams.com
Economic Risk Factors Growth of economy, foreign trade in GDP.Trends of investments and savingsFrequency of business cyclesExtent of economic diversification, diversity of exportsInflation, monetary policy, fiscal policyStrength of local financial marketBalance of payments, international tradeStability of trade earningsElasticity of export and import demandOctober, 2013worldwideteams.com
Economic Risk Factors continuedCurrency: (a) strength, (b) stability, (c) quality of exchangemarkets, (d) depth of exchange markets, (e) extent ofcontrols over exchange markets.Debt: (a) total, (b) short-term as percentage of total debt, (c)debt service ratio,(d) debt-service schedule.International Financial Resources: (a) revenues, (b)borrowing capacity, (c) history of depth repayment, (d) creditrating.October, 2013worldwideteams.com
Hofstede ModelFive Cultural Dimensions: Power distanceIndividualism versus collectivismMasculinity versus femininityUncertainty avoidance.Long-term versus Short-term orientationOctober, 2013worldwideteams.com
Discussion GroupWhich country risk factors arepredominant in Taiwan?October, 2013worldwideteams.com
Doing Business in Taiwan, ChinaDoing Business 2013 data for Taiwan (China).Table lists the overall "Ease of Doing Business"rank (out of 185 economies) and rankings by topics.Lists the economy's distance to frontier (DTF)**measure. Tables summarize key indicators for eachtopic and benchmark against regional and highincome economy (OECD) averages.Retrieved September 17, 2013 omies/taiwan,-china/October, 2013worldwideteams.com
Doing Business in Taiwan, ChinaINCOME CATEGORY: High incomePOPULATION:23,180,000GNI PER CAPITA (US ): 20,200Retrieved September 17, 2013 omies/taiwan,-china/October, 2013worldwideteams.com
Group DiscussionHow do you think Taiwan ranks in “Ease of DoingBusiness” in these business factors?(1 is good, 185 is bad)Protecting InvestorsPaying TaxesTrading Across BordersEnforcing ContractsResolving InsolvencyOctober, 2013Starting a BusinessConstruction PermitsGetting ElectricityRegistering PropertyGetting Creditworldwideteams.com
Doing Business in TaiwanOUT OF 185 ECONOMIES:DOING BUSINESS 2013 RANK: 16DOING BUSINESS 2012 RANK: 25CHANGE IN RANK: 9October, 2013worldwideteams.com
Doing Business In TaiwanTOPIC RANKINGSStarting a BusinessConstruction PermitsGetting ElectricityRegistering PropertyGetting CreditOctober, 20132013201216963270157653167Change in Rank-167-1-1-3worldwideteams.com
Doing Business In TaiwanTOPIC RANKINGSProtecting InvestorsPaying TaxesTrading Across BordersEnforcing ContractsResolving InsolvencyOctober, 20132013201232542390157964278914Change in Rank47104-1-1worldwideteams.com
DTF (Distance to Frontier)DTF measure shows the distance of each economy to the“frontier,” which represents the highest performanceobserved on each of the indicators across all economiesincluded in Doing Business since each indicator wasincluded in Doing Business. An economy’s distance tofrontier is indicated on a scale from 0 to 100, where 0represents the lowest performance and 100 the frontier.(Doing Business, 2013)Retrieved September 17, 2013 omies/taiwan,-china/October, 2013worldwideteams.com
Taiwan - Distance to FrontierDOING BUSINESS 2013 DTF (76.8% POINTS)DOING BUSINESS 2012 DTF ( 72.8% POINTSIMPROVEMENT IN DTF (4% POINTS)Retrieved September 17, 2013 omies/taiwan,-china/October, 2013worldwideteams.com
Need for Country Risk Analysis Anticipate the behavior of a countryEstimating future of country prospectUtilize the opportunity available in the countryPolicy makers need risk informationAttract foreign investmentNeeded to secure lendingConsultant firms provide rating to the countryOctober, 2013worldwideteams.com
Proper Assessment ofCountry Risk Analysis Conceptual awareness of factors that have a bearing oncountry riskAnalytical ability to access how these factors workDetailed knowledge of the countrySpecialized expertise to predict political variablesExpertise in using economic forecasting techniques tomake short-term and long-term projectionsSkill and experience to draw conclusions about debtservicingOctober, 2013worldwideteams.com
Importance of MultinationalCorporations Transfer of capitalTransfer of technologyEffect on balance ofpaymentLinkage effectsDevelopment of humanresources capitalEmployment opportunitiesDevelopment of theeconomyOctober, 2013worldwideteams.com
Problems with MultinationalCorporations Transfer of technology iscostly (and pirated)Profit orientedProduction of non-essentialgoodsPromote regional disparitiesCorrupt practicesExploitation of laborExploitation of naturalresourcesOctober, 2013worldwideteams.com
International Business andGlobalization Review GlobalizationcharacteristicsGlobalization advantagesand disadvantagesGlobalization stagesInternational trade theoriesInternational country riskTaiwan GlobalizationMNC “good and the bad”October, 2013worldwideteams.com
Article ReviewTaiwan Revives itsManufacturing SectorChina’s rising production costs create anopportunity for neighboring TaiwanArticle retrieved September 17, 2013 r, 2013worldwideteams.com
Group DiscussionArticle Review:What were the major pointsfrom the article about internationalbusiness in Taiwan?October, 2013worldwideteams.com
WorldWideTeams Consulting specializes in business expansionand global team performance toincrease sales and profits, solveproblems, and capture opportunitiesDr. Bett Mickels, MBA, s.comOctober, 2013
BibliographyBhalla, V.K. (2008): International Business Environment and Management, 12thEd. Anmol Publications Pvt. Ltd.Hill, Charles W.L (2007): International Business. Competing in the GlobalMarketplace International, 6th Ed., New York: McGraw-Hill.Lambin, Jean-Jacques, (Summer, 2001); Advantages of Globalisation; EuropeanBusiness Forum, No. 6.International Monetary Fund (n.d.); What is Globalization? Retrieved September27, 2013 from htmPeng, Mike (2013): Global Business, 3rd Ed. Madison, Ohio Cengage LearningSouth-Western.Ricardo, David (2006): Principles of Political Economy and Taxation. NewYork, NY; Promethus Books.Sundaram, Anant Kumar & Black, J. Stewart (1995): International BusinessEnvironment Text and Cases. Prentice Publishing, Upper Saddle River, New Jersey.The World Bank, Doing Business: Measuring Business Régulations (n.d.):Retrieved September 17, 2013 omies/taiwan,-china
International Business Business (firm) that engages in international (cross-border) economic activities or the action of doing business abroad (Peng, 2013) Global Business Business around the globe including both international (cross-border) activities and domestic business
3.1 Macro-level feminist analyses of globalization Neo-liberal economic globalization The discourse of globalization 3.2 The impact of globalization The feminization of waged work Women's reproductive work Globalization and female migrant workers Globalization and difference The interaction of global and local forces 3.3 Women's Activism
9 Globalization has a home address: the geopolitics of globalization 127 JOHN AGNEW Cultural globalization 10 The globalization of culture: geography and the industrial production of culture 144 DON MITCHELL AND CLAYTON ROSATI The globalization of fear 11 The globalization of fear: fear as a technology of governance 161 BYRON MILLER PART III
globalization and culture as well as the impact of globalization on the culture. 2. LITERATURE REVIEW 2.1 Globalization According to Amiuwu, 2004, Scholte, 2002, as cited in (Ugbam, Chukwu, and Ogbo, 2014), the word globalization was coined in the second half of the twentieth century; globalization started
What is globalization? Globalization is the integration of national economies into the international economy through trade, direct foreign investment (by corporations and multinationals), short term capital flows, international flows of workers, and flows of technology.* (Note this defines economic globalization rather than cultural globalization)
Unit-IV:Globalization and Culture: The Ethos of Globalization (Individualism, Freedom, Consumerism) Cultural Homogenization, Hegemony and Dominance Impact of Globalization on poor and women . UNIT-1 . Free Trade 1.3.4. Extended Economic Activities 1.3.5. Globalization is universal, but not a uniform process. 1.3.6. Globalisation is a .
Global Business Today CharlesW. L. Hill University of Washington McGraw-Hill Irwin. contents PREFACE xiii PART ONE Introduction and Overview 2 Chapter One Globalization 2 Opening Case: The Globalization of Starbucks 3 Introduction 5 What Is Globalization 7 The Globalization of Markets 7
TO WHAT EXTENT SHOULD WE EMBRACE GLOBALIZATION? Chapter 2 Identity and the Forces of Globalization Figure 2-1 Forces like trade, transportation, communication technology, and international media have increased the pace of globalization and changed what you buy, watch, and read, how you communicate, where you go, and how you get there.
Globalization and the Politics of International Finance: The Stiglitz Verdict [A review article on Joseph Stiglitz: Globalization and Its Discontents, Norton & Co., New York, 2002.] 1. Introduction Joseph Stiglitz's recent book, Globalization and
