International Business.topic 8

8/22/2019 International Business.topic 8

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TOPIC #8

The Future ofInternational Business


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The Future of International Business

1. Reduction of Protectionism

2. European Union

3. NAFTA

4. Impact of Cultural Differences

5. Global Dependency


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The Future of International Trade

Protectionism

a term to describe when countries seek to protect theirindividual economic interests by imposing tariffs on othercountries or restricting external trade.

Economic experts agree that such practices will hurt theglobal economy as it is all interconnected.

APEC is the fastest growing trading group and largesttrading bloc in the world and engages in protectionismpractices by imposing tariffs and other trade barriers oncountries outside of APEC.


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European Union (EU)

27 European countries represent a single market inEurope

All but the UK and Denmark have adopted a the euro asthe single currency to be used in member states

It has its own elected government

EU court rulings over rule individual country court rulings

and/or laws.

Citizens of member states may travel, move, and workfreely in each others countries.

Population is currently about 370 milion.


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Evolution of NAFTA

Will NAFTA emerge into a union similar tothe EU where citizens of Canada, Mexico,and the US would be able to move freelyinto each others countries where onecurrency would be used for all threecountries?


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Impact of Cultural Differences

Culture

the sum of a countrys way of life, beliefs,

customs

Influences how things are purchased, sold, Sets boundaries on what can or can not be done

Impacts preferences, style, values, and norms

May be represented by a specific language


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Cultural Differences

In order to do business with differing cultures, muchmarket research is needed to help companiesunderstand various similarities and differences evenwhen dealing with everyday cultural norms dealing

with people such as:

1. Punctuality

2. Greetings

3. Nonverbal communication signals4. Good Manners

5. Decision making


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Punctuality

Punctuality Norms in North America?

People are expected to be

on time

Rely on books, calendars and

even pay a fee sometimes

for missed appointments

Punctuality Norms in Other Countries

Time is considered flowing, flexible,beyonds people control


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Greetings

Shaking hands differs from onecountry to the next

Eye contact made in somecountries, not in others

Bowing before an elderacquaintance versus not bowingat all


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Nonverbal Communications Signals

Considered rude in Asian cultures to refuse someones

request, so an Asian business person may not give adirect no answer to a sales request

A nod means yes to North Americans but no to aBulgarian.

Shaking the head side to side means no to NorthAmericans but yes to Bulgarians.

The sign okay with ones hand is a symbol for moneyin Japan and is an offensive gesture in Brazil.

Personal space interpretations also differs from placeto place.


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Good Manners

In North America, getting down tobusiness is the norm when tobusiness people meet.

In other Asian and Latin Americancountries it would be considered rude

not to discuss family, friends, andfavours first to establish a personalrelationship before business.


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Decision Making

In some cultures, decisions are madefrom the top down approach, inothers, from the bottom up

approach.


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Other Differences

North Americans read from right to left.

Israel and Egyptians read left to right.

This difference may impact the order in

which a sequential advertisement is laidout from one country to another.


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Other Sources

Wilson Jack et al. The World ofBusiness, 5th Ed. Nelson EducationLtd., Canada, 2007

Documents

International Business.topic 8