Chapter One Powerpoint Presentation

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  • Chapter 1 Learning Objectives

    After studying this chapter, you should be able to:

    Explain the concepts of international business and global business

    Articulate what you hope to learn by reading this book and taking this course

    Identify one most fundamental question and two core perspectives that provide a framework for studying this field

    Participate in the debate on globalization with a reasonably balanced and realistic view and a keen awareness of your likely bias in favor of globalization

    Have a basic understanding of the future of the global economy and its broad trends

  • INTERNATIONAL BUSINESSAND GLOBAL BUSINESSinternational business - business (firm) that engages in international (cross-border) economic activities or the action of doing business abroadglobal business - business around the globe, including both international (cross-border) activities and domestic business activitiesmultinational enterprise (MNE) - firm that engages in foreign direct investmentsforeign direct investment - investments in, controlling, and managing value-added activities in other countries

  • INTERNATIONAL BUSINESSAND GLOBAL BUSINESSgross national product (GNP) - measured as the sum of value added by resident firms, households, and government operating in an economygross domestic product (GDP) - total market value of all final goods and services produced within a country in a given period of time usually a calendar yeargross national income (GNI) - GDP plus income from nonresident sources abroad the term used by the World Bank and other international organizations to supersede the GNP termpurchasing power parity (PPP) - adjustment made to the GDP to reflect differences in the cost of living

  • WHY STUDY GLOBAL BUSINESS?expatriate manager (expat) - manager who works abroadinternational premium - significant pay raise commanded by expats when working overseas

  • FIRST CORE PERSPECTIVE:AN INSTITUTION-BASED VIEWformal rules - requirements that treat domestic and foreign firms as equals enhance the potential odds for foreign firms success, or those that discriminate against foreign firms would undermine the chances for foreign entrantsinformal rules - cultures, ethics, and norms that play an important part in shaping the success and failure of firms around the globeliability of foreignness - inherent disadvantage that foreign firms experience in host countries because of their nonnative status

  • WHAT IS GLOBALIZATION?globalization - close economic integration of countries and peoples of the worldssemiglobalization - strategy that suggests that barriers to market integration at borders are high but not high enough to completely insulate countries from each other