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Copyright © Glencoe/McGraw-Hill Slide 1 of 11
BUSINESS MANAGEMENTReal-World Applications & Connections
GLENCOE
SectionSection 7.2The Global Economy
In this section: A global economy is an economy in which companies compete actively with businesses from all over the world. This section discusses:
• The Rise of the Global Economy• Doing Business Globally
Copyright © Glencoe/McGraw-Hill Slide 2 of 11
BUSINESS MANAGEMENTReal-World Applications & Connections
GLENCOE
SectionSection 7.2The Global Economy
What You’ll Learn
• How NAFTA has increased international trade within North America.
• How managers decide how to get involved in the global economy.• How managers deal with the challenges they face when working
in a different culture.
Copyright © Glencoe/McGraw-Hill Slide 3 of 11
BUSINESS MANAGEMENTReal-World Applications & Connections
GLENCOE
SectionSection 7.2The Global Economy
Why It’s Important
Business managers must understand how to function in the global economy.
Copyright © Glencoe/McGraw-Hill Slide 4 of 11
BUSINESS MANAGEMENTReal-World Applications & Connections
GLENCOE
SectionSection 7.2The Global Economy
Key Terms
• global economy
• free trade area
• multinational corporation
Copyright © Glencoe/McGraw-Hill Slide 5 of 11
BUSINESS MANAGEMENTReal-World Applications & Connections
GLENCOE
SectionSection 7.2The Global Economy
The Rise of the Global Economy
• Improvements in Telecommunications Technology• Political Changes• Free Trade Areas
Many factors have led to the rise of the global economy.
Copyright © Glencoe/McGraw-Hill Slide 6 of 11
BUSINESS MANAGEMENTReal-World Applications & Connections
GLENCOE
SectionSection 7.2The Global Economy
NAFTA
• The largest free trade area in the world is in North America. • NAFTA stands for North American Free Trade Agreement.• Businesses in the United States, Mexico, and Canada can sell their
products anywhere in North America without facing major trade restrictions.
Copyright © Glencoe/McGraw-Hill Slide 7 of 11
BUSINESS MANAGEMENTReal-World Applications & Connections
GLENCOE
SectionSection 7.2The Global Economy
Forms of International Operations
• Working through a foreign intermediary• Signing a licensing agreement with a foreign company• Forming a strategic alliance• Becoming a multinational corporation
Copyright © Glencoe/McGraw-Hill Slide 8 of 11
BUSINESS MANAGEMENTReal-World Applications & Connections
GLENCOE
SectionSection 7.2The Global Economy
Multinational Companies
• Use imported materials.• Produce goods in other countries.• Sell products in other countries.
There are many ways for companies to do business globally.
Copyright © Glencoe/McGraw-Hill Slide 9 of 11
BUSINESS MANAGEMENTReal-World Applications & Connections
GLENCOE
SectionSection 7.2The Global Economy
Fig 2-1
Challenges of Working in an International Environment
• work with customers, producers, suppliers, and employees from different countries
• become familiar with and show respect for local laws and customs
• be aware of different cultural attitudes
Managers must learn to:
Copyright © Glencoe/McGraw-Hill Slide 10 of 11
BUSINESS MANAGEMENTReal-World Applications & Connections
GLENCOE
SectionSection 7.2The Global Economy
Copyright © Glencoe/McGraw-Hill Slide 11 of 11
BUSINESS MANAGEMENTReal-World Applications & Connections
GLENCOE
SectionSection 7.2The Global Economy
Fact and Idea Review
1. What is NAFTA?
2. What is a multinational corporation?
3. What are some of the challenges business managers who work in foreign countries face?
4. Give two examples of foreign business customs that differ from customs in the United States.
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