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Globalization n International Linkage
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7/15/2019 Chap001-Globalization n International Linkages
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Professor H. Michael Boyd, Ph.D.
INTERNATIONAL
MANAGEMENTGLOBAL
Business and PeopleManagement
Professor H. Michael Boyd, Ph.D.
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Brief introductionrolandxavier.com
Name: Assoc. Prof. Dr. Siri Roland Xavier, MMIMAcademic Qualifications: LL.B (Hons) University of London, UK; MBA, Charles Sturt University, Australia [Valedictorian] Doctor Of Business Administration, University of Newcastle,
AustraliaWhat I do: Deputy Dean of the Bank Rakyat School of Business and
Entrepreneurship. Programme Director for Entrepreneurship. National Team Leader of Global Entrepreneurship Monitor.
Board member, Global Entrepreneurship Research Association(GERA). Editorial Board Member, Journal of Global Entrepreneurship
Research (JGER), 2012-2013. Reviewer ofEmerald Emerging Markets Case Studies focusing
on SEA
Lead writer of the Entrepreneurship Global Report, 2012.
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My International Research projects
Global Entrepreneurship Monitor (GEM), National TeamLeader and Principal Researcher, since 2009-2013: TheMalaysian Report. Yearly university grant RM350, 000.
Successful Transgenerational Entrepreneurship Practices(STEP), Team member, since 2009-2013. Yearly grant value
MYR70,000. GEM-International Development Research Centre (IDRC)
South East Asia, Research Project Leader, 2013, Grant valueUSD700,000.
United Nations Economic and Social Commission for Asiaand the Pacific (ESPAC), Project member, MultinationalEnabling Environment for Womens Economic EmpowermentThrough Entrepreneurship, 2012, Grant value MYR45,252.
Total 2013 Research Grants=MYR2,565,252
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International Management
International management involves
Applying management concepts and techniques ina multinational environment and
Adapting management practices to differenteconomic, political, and cultural environments.
Multinational corporation (MNC)
Operations in more than one country International sales
Nationality mix of managers and owners
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The Worlds Top Nonfinancial MNCsRanked by Foreign Assets, 2007
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The Worlds Top Nonfinancial MNCs
from Developing CountriesRanked by Foreign Assets, 2007
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Globalization and Internationalization
GlobalizationProcess of social, political, economic, cultural, and
technological integration among countries aroundthe world.
Hastened byOffshoringProcess by which companies undertake some
activities at offshore locations instead of theircountries of origin.
OutsourcingSubcontracting or contracting out of activities to
external organizations that had previously beenperformed by the firm.
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Map of the World
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The workforce is Global
World Population 2011
The Face of Seven Billion People
On a planet of seven billion peoplethe population in 2011
who is the most typical human?
According to statistics: a 28-year-old Han Chinese male.
The worlds largest age bracket is 28, the largest ethnic group is Han, and with 1.3 billion people, the most populous nation is China.
(By 2030, China will lose its top population status, and the
most typical human face will be Indian.)
The typical human is male only by a whisker: There are1.01 men in the world for every woman.
Other top-ranking traits among the worlds population:
82% are literate 40% work in service; 38% in agriculture; 22% I Industry 51% live in urban environments 33% are Christian; 21% are Muslim; 13% are Hindu 13% speak Mandarin as their first language; 5% Spanish;
5% English
19% are Chinese; 17% are Indian; 4% are American.National Geographic, March 2011
http://web.bentley.edu/hboyd/readings_files/Global/World%20Population%202011.pdf
http://web.bentley.edu/hboyd/readings_files/Global/World%20Population%202011.pdfhttp://web.bentley.edu/hboyd/readings_files/Global/World%20Population%202011.pdfhttp://web.bentley.edu/hboyd/readings_files/Global/World%20Population%202011.pdfhttp://web.bentley.edu/hboyd/readings_files/Global/World%20Population%202011.pdf7/15/2019 Chap001-Globalization n International Linkages
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Our World Changes Faster Than we Think!
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The global market may becomethe only place to find skills needed
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Globalization: Pros and Cons
Benefits of GlobalizationWealthJobsTechnology
Lower prices
Criticisms of Globalizationoff-shoring of business service jobs to lower-wage
countriesgrowing trade deficitsslow wage growthenvironmental and social impacts
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Global and Regional Integration
Global AgreementsWorld Trade Organization (WTO)General Agreement on Tariffs and Trade (GATT)
Regional AgreementsNorth American Free Trade Agreement (NAFTA)U.S.-Central American Free Trade Agreement
(CAFTA)
European Union (EU)Association of Southeast Asian Nations (ASEAN)Free Trade Agreement of the Americas (FTAA)
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International Economic Powerin the Global Economy
Shifting landscape due to
Economic integration
Economic potential of emerging markets
BRIC countries (Brazil, Russia, India, and China)could be among the four most dominanteconomies by 2050
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The Worlds Largest Economies 2005 and 2020(Projected)
Measured by GDP at Market Exchange Rates
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The Worlds Largest Economies 2005 and 2020(Projected)
Measured by GDP at Purchasing Power Parity
Ch i D hi D l i
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Changing Demographics: DevelopingCountries on the Rise
(ranked by size)
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Trends in Trade andInternational Investments
International Trade In 2009 merchandise and commercial services
exports declined
Foreign direct investment (FDI)
Investment in property, plant, or equipment inanother countryGrowing at healthy rateOutpacing domestic growth in most countriesDeclined in 2009 due to the global recession
W ld M h di T d b R i
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World Merchandise Trade by Regionand Selected Country, 2009
(in U.S.$ billions or percent)
World Foreign Direct
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World Foreign DirectInvestment Inflows
(in U.S.$ millions)
World Foreign Direct
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World Foreign DirectInvestment Inflows
(in U.S.$ millions)
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Global Economic Systems
Market Economy
Command Economy
Mixed Economy
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Economic Performanceby Major World Region
Established Economies North America European Union Japan
Emerging Economies Central and Eastern Europe China Other Emerging Markets of Asia India
Developing Economies on the Verge South America Middle East and Central AsiaAfrica
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Map of theAmericas
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Economic PerformanceEstablished Economies
North AmericaOne of the four largest trading blocs in the worldCombined purchasing power of U.S., Canada and
Mexico approaches $12 trillion
Free-market-based economy is attractive to privatefirms
United StatesForeign MNCs find U.S. a lucrative expansion marketForeign firms welcomed as investors in U.S. marketU.S. firms hold market dominance in many European
markets; gaining market share in Asia
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Economic PerformanceEstablished Economies
CanadaU.S.s largest trading partnerMost of the largest foreign-owned Canadian
companies are totally or heavily U.S.-owned
Legal and business environment in Canada is similarto that in U.S.
MexicoStrongest Latin American economyVery strong maqui ladora industryTrade with both Europe and Asia has increasedNow competitive with Asia for the U.S. market
E i P f
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Economic PerformanceDeveloping Economies on the Verge
South America
Hampered by foreign debt and severe inflation
But, intercountry trade is increasing
Countries looking to do business with U.S.
Brazil
Economy is now flourishing and attracting
investment from MNCsPrivatization and stable government
E i P f
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Economic PerformanceDeveloping Economies on the Verge
Chile
Uncertain future, but helped by trade agreements
ArgentinaAbundant natural resources
Economic problems persist
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Map of Europe
E i P f
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Economic PerformanceEstablished Economies
European UnionUltimate objective
Eliminate all trade barriers among member countriesEmergence of the EU as an operational economic union
A unified Europe could become the largest economic market interms of purchasing power in the world
Foreign MNCs trying to gain foothold in EUAcquisitions, alliances, cooperative R&D efforts
Economic linkages between the EU and newlyemerging Central and Eastern European countriesChallenge is to absorb former communist bloc countries
Financial crises in Greece and Ireland puttingpressure on the euro
E i P f
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Economic Performance
Established Economies
Japan
Huge economic success in 1970s and 1980s
Ministry of International Trade and Industry
(MITI)Keiretsus
Vertically integrated industries
Holdings provide assistance needed in providing goodsand services to end users
Decade long recession in 1990sMore competition from emerging economies
Poor management decisions
Remains a formidable competitor in the Pacific Rim,
North America, and Europe
E i P f
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Economic PerformanceEmerging Economies
Central and Eastern Europe
Russia
Dismantling of price controls and privatization
Membership in International Monetary Fund(IMF) controlling inflation
Crime and political uncertainty
Czech Republic, Hungary, Poland
Privatization
Inflation
Political uncertainty
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Map of Asia-Pacific
Economic Performance
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Economic PerformanceEmerging Economies
China
Real economic growth of 12 percent in 2007, 9percent in 2008, and 11.5 percent in 2009
Savings glut in corporate sector
Vast developmental needs
Unemployment concerns
Attractive to investors despite political risk
Product pirating is a major problemCurrency value
Government policies favor domestic firms
Economic Performance
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Economic PerformanceEmerging Economies
South Korea
Chaebols
Very large family-held conglomerates
Solid economy, moderate growth and inflation, lowunemployment
Hong Kong
Part of Peoples Republic of China
Uncertainty about the role the Chinese government
Economic Performance
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Economic PerformanceEmerging Economies
Singapore
Success story
Leader and financial center for region
Taiwan
Progressed from labor-intensive economy to onedominated by technologically sophisticated
industriesbanking, electricity generation, petroleum refining and
computers
Economic Performance
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Economic PerformanceEmerging Economies
Thailand, Malaysia, Indonesia
Large population base
Inexpensive labor
Considerable natural resourcesAttractive to outside investors
Economic Performance
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Economic PerformanceEmerging Economies
India
Large population
Recent trend of locating software and high value-
added services to this country boosting middle- andupper-class market for goods and services
Attractive to U.S. and British investorswell educated, English speaking, technologically
sophisticated workers
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Map of the Middle East
Economic Performance
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Economic PerformanceDeveloping Economies on the Verge
Middle East and Central Asia
Large oil reserves
Highly unstable geopolitical and religious forces
Plagued by continuing economic problems
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Map of Africa
Economic Performance
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Economic PerformanceDeveloping Economies on the Verge
Africa
Considerable natural resources
African nations remain very poor and undeveloped
International trade is not a major sources of income
Populace divided into 3,000 tribes that speak 1,000languages and dialects
Major political instability
Poverty, starvation, illiteracy, corruption,overcrowding among many social problemsnegatively affecting economic sector
Worlds Most
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World s Most
Competitive Nations, 2010
M k t P t ti l I di t R ki f
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Market Potential Indicators Ranking forEmerging Markets, 2009
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Culture
Operating system of the mind
Distinguishes one group from another
Impacts attitudes, beliefs, and behaviorsOften unconscious
Understand to predict behavior
Danger of generalizations