View
221
Download
0
Category
Preview:
Citation preview
1-1
4-1
Influence of Institutions on Influence of Institutions on Firms, Managers Firms, Managers and Firm Behaviorand Firm Behavior
InstitutionsInstitutions
Formal Formal and
Informal Constraints
Formal Formal and
Informal Constraints
Informal Normative &
Cognitive Constraints
Informal Normative &
Cognitive Constraints
FirmsFirms
ManagersManagers
Firm BehaviorFirm Behavior
© J. McNett, Influenced by W. R. Scott (2008) and M. W. Peng (2002, 2009) LO1LO1
1-2
4-2
Global Level InstitutionsGlobal Level Institutions
United Nations Bretton Woods Institutions
International Monetary Fund World Bank
World Trade Organization
1-3
4-3
Global Level InstitutionsGlobal Level InstitutionsThe United NationsThe United Nations
Promotes peace and global stability 192 member-nations Has many functions related to business
General Assembly Deliberative body of the UN All member-nations, each with one vote
Security Council Responsible for peace and security 5 permanent members with veto power(U.S., Russia,
China, France, UK) 10 elected members
LO3LO3
1-4
4-4
Global Level Institutions Global Level Institutions Bretton WoodsBretton Woods
Meeting in Bretton Woods New Hampshire, U.S. at end of World War II (July 1944)
44 Allied Nations Established Monetary Institutions
International Monetary Fund (IMF) World Bank
Established a Monetary System
LO4LO4
1-5
4-5
Global Level Institutions Global Level Institutions International Monetary FundInternational Monetary Fund
Promotes international monetary cooperation Coordinates multilateral monetary rules and their
enforcement 185 members who contribute funds on quota
base Quota determines the country’s number of votes IMF lends out these funds to members
LO4LO4
1-6
4-6
Global Level Institutions Global Level Institutions International Monetary FundInternational Monetary Fund
Facilitates expansion and balanced growth of international trade
Promotes exchange stability and orderly exchange arrangements among members
Establishes a multilateral system of payments Makes funds available for balance of payments
corrections
LO4LO4
1-7
4-7
Global Level Institutions Global Level Institutions International Monetary Fund International Monetary Fund
Current IssuesCurrent Issues
Convince rising economies to accept multilateral responsibilities beyond their economies
Prevent protectionism in U.S. and Europe as Asian economies grow
Become action-prone as financial crises become global and more complex
Support the process of regionalization of currencies Help financial markets spread risk from ecological
issues
LO4LO4
1-8
4-8
Global Level Institutions Global Level Institutions World Bank’s Major InstitutionsWorld Bank’s Major Institutions
The World Bank funds development projects Comprised of two major and three smaller
institutions International Bank for Reconstruction and
Development (known as the World Bank) Funds development loans to middle income,
credit-worthy countries International Development Association
Funds poorer nations’ developmentLO4LO4
1-9
4-9
Global Level InstitutionsGlobal Level InstitutionsThe World Trade OrganizationThe World Trade Organization
The World Trade Organization (WTO) provides and helps implement rules of trade 151 member nations; began in 1995 Negotiates core agreements among member
nations Establishes rules for trade Helps settle trade disputes
Outgrowth of General Agreement on Tariffs and Trade (GATT) Induced trade liberalization from 1947 to 1995
LO4LO4
1-10
4-10
Global Level InstitutionsGlobal Level InstitutionsThe World Trade OrganizationThe World Trade Organization
Uruguay Round Established the WTO The last extended conference of GATT
negotiations WTO Principles
1. Trade without discrimination (MFN principle)2. Freer trade, gradually, through negotiation3. Predictability, through “binding” and transparency4. Fair competition5. Encouragement of development and economic
reformLO5LO5
1-11
4-11
Global Level InstitutionsGlobal Level InstitutionsThe World Trade OrganizationThe World Trade Organization
ChallengesChallenges
WTO talks in Doha, Qatar (2001): members agreed to work on implementing present agreements
Developing nations face unique constraints that limit their ability to benefit from WTO trading system
Aid-for-trade initiative (2008) Major problem: Agricultural subsidies and tariffs Trade-related intellectual property rights (TRIPS):
protection of copyrights, trademarks, trade secrets, other intellectual property matters
LO5LO5
1-12
4-12
Regional InstitutionsRegional InstitutionsCooperative Military Cooperative Military
and Security Agreementsand Security Agreements
1-13
4-13
Regional InstitutionsRegional InstitutionsOrganization For Economic Organization For Economic
Cooperation and DevelopmentCooperation and Development
Organization for Economic Cooperation and Development (OECD) Group of developed countries dedicated to
promoting economic expansion in its member-nations
Provides information on economic and other activities within its member nations
Provides setting for discussion of shared economic policy issues
LO6LO6
1-14
4-14
Regional InstitutionsRegional InstitutionsOther Economic InstitutionsOther Economic Institutions
Organization of Petroleum Exporting Countries (OPEC) Cartel of 12 petroleum exporting countries
The Group of Eight (G8) Group of government leaders from major
industrialized nations that meets regularly to discuss issues of concern
LO7LO7
1-15
4-15
The G8 Members (The G8 Members (www.undp.org))
http://atlas.nrcan.gc.ca/site/english/maps/reference/international/g8/map.jpgLO7LO7
1-16
4-16
Regional Economic InstitutionsRegional Economic Institutions
NAFTA Established January 1, 1994 Agreement creating a free trade area among
Canada, Mexico, and the United States EFTA
A free trade area between Norway, Iceland, Liechtenstein, Switzerland
LO8LO8
1-18
4-18
Regional Institutions Regional Institutions The European UnionThe European Union
European Commission Runs day-to-day operations
European Court of Justice (ECJ) Rules on policy issues
European Monetary Union Established use of euro in the 15-country euro
zone Three “old EU” countries do not participate:
Denmark, Sweden, and the United Kingdom The single currency reduces the cost of doing
business across EMU country bordersLO8LO8
Recommended