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Welcome to AB 220
Global BusinessUnit 2
Culture and Political Economy
Bill Okrepkie
AIM - WSOkrepkie
(605) 342-1689 (h)
(605) 390-0466 ©
Agenda
• Admin • Welcome everyone• Review Unit 1• Chapters 2 and 3. Culture and Political Economy• Conclusion of Seminar
• Hi I’m Bill Okrepkie and welcome to this week’s seminar. Please refer to me as Bill and please be comfortable with this. It is easier to spell then Okrepkie :).
Some of the Basics• Print the syllabus – course home or doc sharing areas• Kaplan emails – access, check daily, email tab• My addresses – [email protected] • AIM address – WSOkrepkie• Home phone number – 605-342-1689• Cell number – 605-390-0466• Everyone have an AOL AIM account• Contact tech support for any computer problems• Office hours
Some of the Basics cont.
• Don’t worry aobute speling errores when you tpyt - happens to the best of us.
• Seminars are not graded
• Questions so far
Course Description
• This course gives you an overview of global business.
• You will receive an introduction to the terminology, and the cultural, economic, strategic, market and production differences encountered in the global business environment.
• This course serves as an introduction to the factors involved in making business decisions regarding globalization.
• Case studies and real world scenarios will illustrate the reality of doing business on this broad scale.
Course Outcomes
• By the end of this course, you should be able to:
• Identify the meanings of global business terminology • Discuss differences in global organizational structures • Evaluate the reasoning of opposing perspectives on ethical
issues • Analyze the economic and political risk factors involved in a
global business scenario
Your First Weekly Activity: Reading!
• This course uses a text: Title: Global Business Today, 6th Edition
Author: Hill, Charles W.L. ISBN: 007807455X / 9780078074554
•Your Reading this week: Chapter 1 pp. 3-36 in the textbook
•Always make your reading the first activity of the unit!
Any questions ?
Your Second Weekly Activity: Class Discussion! It Allows Us To:
• Learn from the many different perspectives represented
• Add experiential knowledge to our course material
• Ask questions• Get help from instructor and classmates• Exchange ideas• Get feedback• And they are fun!
How To Do Well In Class Discussion:• Post early: Your Initial Post must be made no later than Saturday, midnight
EST. The earlier the better! Posts must be made on at least 3 different days. This is expected to be an on-going discussion!
• Respond to at least two classmates, not including the instructor! • Be sure your Initial Discussion Post is at least 100 words in length
• Check out the key terms at the end of each unit – try to incorporate them
• Use web based research where appropriate to make a point. If you use referenced material, this must be correctly cited.
• Be thoughtful, thorough, and substantive. The posts should address the Discussion questions or topics.
• Check frequently to see if anyone has asked questions
• Spell Check your posts ! Proper grammar and punctuation are required.• Pay attention to the rubric in your syllabus
Any questions ?
Your Third Weekly Activity: Homework Assignments!
• Exercises may consist of answering questions in a text chapter, writing a paper, or completing some other assignment. Exercises are usually performed offline.
• Proof, proof, proof – grammar and spelling matter. Apply the concepts and language of the course
• Answer all the questions in terms of the key concepts of that unit• Additional research may be used. • Assignments are due by Tuesday Midnight EST. • Is everyone clear on how to use the Dropbox?• If something is confusing, please check with your me.
How to Do Well in Homework Assignments:
• You are expected to use the APA format. Please let me know if you have any concerns or questions.
• APA style means that you are required to include: 1) A title page, 2) The paper itself, 3) A references page, and 4. In text citing.
• A title page contains three items: the paper's title, the date and the author's name.
• The last thing required is the references page. Sources should be alphabetized by the author's last name (or, for sources without authors, by the first letter in the title) and the second line of each source should be indented a half inch (the first line is not indented).
• If something is confusing, please check with me .
How To Do Well In Homework Assignments Page (Continued)
• Be sure your response adequately answers the assignment question (s).
• Be sure your Homework Assignment is well-written without spelling errors, using complete sentences, and paragraphs.
• Be sure your assignment is submitted to the correct Dropbox as an attachment in MS Word (.doc) format.
• Be sure your file is named using the correct Kaplan file naming convention.
Any questions ?
Your Fourth Required Weekly Activity: Reviews!
• Multiple choice quizzes• Reviews are not timed• Think the question through• Retake the quizzes as necessary for most quizzes• Press the “Submit for Grade” button when you are finished and
ready for me to grade your Review• If you have any technical problems, call the Help Desk immediately
Any questions ?
Class Seminars!
• Fun and helpful• Opportunity to ask questions• Opportunity to interact with classmates• You can review the recording if you are unable to attend• Go to the KHE link as you did to enter this Seminar and
choose “History.” Choose the date of the Seminar you would like to review and click on it.
• Seminar Participation is not graded but you are strongly encouraged to attend!
• We will have seminars in Unit 1, 3, 6, and 9.
Any questions ?
Class Calendar
Unit 1Introduction to Global Business
• Introductions• Reading • Discussion• Assignment-Simulation• Seminar• Graded work
- Discussion Posts- Simulation: Geography/ Time Zone Quizzes
Unit 2Culture and Political Economy
• Reading • Discussion- Investing in Georgia• Assignment- Risk in Bolivia and Venezuela• Quiz- Hofstede’s Cultural values• Geography quiz – Extra Extra• Graded work
- Discussion posts- Assignment- paper
•
Unit 3Ethics and Social Responsibility in a
Global Environment
• Reading and video- R. Ketcham• Discussion- Ethics approaches• Assignment-Google in China• Ungraded Sustainability Quiz• Seminar• Graded work
- Discussion Posts- Assignment: paper
Unit 4Trade and Investment
• Reading • Discussion- Mercantilism- China • Assignment- Subsidies and Tariffs• Review Quiz- True/False• Vocabulary Review - ungraded• Graded work
- Discussion Posts- Assignment Case Study paper- Review Quiz– One time True/False
Unit 5Foreign Direct Investment
• Reading • Discussion-FDI in Ireland & Japan Starbucks case• Assignment-FDI risk in the BRIC countries• Graded work
- Discussion Posts
- Assignment: Memo to Management
Unit 6Export / Import
• Reading • Discussion- LOC/Export/Import • Quiz• Blog- Business etiquette• Seminar • Graded work
- Discussion Posts- Quiz- unlimited times - Blog- Business Etiquette in China
Unit 7The Strategy and Structure of
International Business
• Reading • Discussion- IKEA/Time Zones • Assignment- Organizational Structures• Seminar- Jing presentation• Graded work
- Discussion Posts
- Assignment paper
Unit 8Entering Foreign Markets
• Reading • Discussion: ING entering the U.S.• Assignment: Final Project start-Power Point • Graded work
- Discussion Posts
- Assignment: PPT
Unit 9Global Production, Outsourcing and
Logistics
• Reading • Discussion: Trax Mountain Bikes• Final Project: India/ Mexico- IKEA• Seminar• Preview Unit 10 Writing Assignment• Graded work
- Discussion Posts- Assignment: Final Project
Unit 10Reflection
• Discussion-optional• Writing Assignment• Quiz• Graded work
- Writing Assignment
- Quiz
Any questions ?
Introduction to Global Business
What Is Globalization?
• Globalization refers to the trend towards a more integrated global economic system
• Two key facets of globalization are:- the globalization of markets
- the globalization of production
The Globalization of Markets
• The globalization of markets refers to the merging of historically distinct and separate national markets into one huge global marketplace
• In many markets today, the tastes and preferences of consumers in different nations are converging upon some global norm
• Examples of this trend include Coca Cola, Starbucks, Sony PlayStation, and McDonald’s hamburgers
The Globalization of Production
• The globalization of production refers to the sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production (labor energy, land, and capital)
• The goal for companies is to lower their overall cost structure or improve the quality or functionality of their product and gain competitive advantage
• Examples of companies doing this include Boeing and Vizio
The Emergence of Global Institutions
• The World Trade Organization (WTO) which is responsible for policing the world trading system and ensuring that nations adhere to the rules established in WTO treaties
-In 2008, 151 nations accounting for 97% of world trade were members of the WTO
• The International Monetary Fund (IMF) which maintains order in the international monetary system
The Emergence of Global Institutions
• The World Bank which promotes economic development
• The United Nations (UN) which maintains international peace and security, develops friendly relations among nations, cooperates in solving international problems and promotes respect for human rights, and is a center for harmonizing the actions of nations
Declining Trade and Investment Barriers
• International trade occurs when a firm exports goods or services to consumers in another country
• Foreign direct investment (FDI) occurs when a firm invests resources in business activities outside its home country
• During the 1920s and 1930s, many nations erected barriers to international trade and FDI to protect domestic industries from foreign competition
Declining Trade and Investment Barriers
• After WWII, advanced Western countries began removing trade and investment barriers
• Under GATT (the forerunner of the WTO), over 100 nations negotiated further decreases in tariffs and made significant progress on a number of non-tariff issues
• Under the WTO, a mechanism now exists for dispute resolution and the enforcement of trade laws, and there is a push to cut tariffs on industrial goods, services, and agricultural products
Declining Trade and Investment Barriers
• Lower trade barriers enable companies to view the world as a single market and establish production activities in optimal locations around the globe
• This has led to an acceleration in the volume of world trade and investment since the early 1980s
The Role of Technological Change
• Major advances in communication, information processing, and transportation
• Microprocessor has lowered the cost of global communication
• Commercial jet aircraft and super freighters
The Changing World Output and World Trade Picture
• Rapid economic growth in countries like China, Thailand, and Malaysia
• Decline in the U.S. share of world output and world exports seems likely
• Increase in world output by developing nations such as China, India, Indonesia, Thailand, and South Korea.
• Decline in world output by industrialized countries such as Britain, Japan, and the United States
The Changing World Order
• The collapse of communism in Eastern Europe• Economic development in China has created huge
opportunities despite continued Communist control• Free market reforms and democracy in Latin America
have created opportunities for new markets and new sources of materials and production
The Globalization Debate
• Is the shift toward a more integrated and interdependent global economy a good thing?
- Many experts believe that globalization is promoting greater prosperity in the global economy, more jobs, and lower prices for goods and services
- Others feel that globalization is not beneficial
Globalization, Jobs, and Income
• Opponents - Jobs in advanced economies are being lost to low-wage nations
• Supporters - The benefits of free trade outweigh its costs -While some jobs may be lost, the economy as a whole is better off
• Supporters argue that free trade will result in countries specializing in the production of those goods and services that they can produce most efficiently, while importing goods and services that they cannot produce as efficiently, and that in doing so, all countries will gain
Globalization, Labor Policies, and the Environment
• Critics - Free trade encourages firms to move offshore to less developed countries with lax environmental and labor regulations
• Supporters - Free trade does not lead to more pollution and labor exploitation, it leads to less as countries develop
Globalization and National Sovereignty
• Critics - Economic power is shifting away from national governments and toward supranational organizations such as the WTO, the European Union (EU), and the UN
• Supporters – disagree the power of these organizations is limited to what nation-states collectively agree to grant
-The organizations must be able to persuade members states to follow certain actions
-Without the support of members, the organizations have no power
Globalization and the World’s Poor
• Critics – The gap between rich and poor has gotten wider and that the benefits of globalization have not been shared equally
• Supporters - The actions of governments have made limited economic improvement in many countries- Totalitarian regimes- Endemic corruption- Have few property rights- Involved in war- Burdened by high debt
Managing in the Global Marketplace
1. Countries differences require companies to vary their practices country by country
2. Managers face a greater and more complex range of problems
3. International companies must work within the limits imposed by governmental intervention and the global trading system
4. International transactions require converting funds and being susceptible to exchange rate changes
Results of increased globalization of investment and trade
Discussion Question
• Read the article on Globality and the Seven Struggles by the Boston Consulting Group.
• Discuss how you think these struggles are affecting your country’s competitiveness globally.
• How is this impacting you and/or your job (and your company), family and friends?
• What are the seven struggles?
The seven struggles
• 1. minding the cost gap.• 2. Growing people.• 3. Reaching deep into markets• 4. Pinpointing• 5.thinking big, acting fast, going outside.• 6. Innovating with ingenuity.• 7. Embracing manyness.
Any questions ?
MT220 Unit 2 Objectives
During this unit, we will:• Use an International Organization site to extract
pertinent information• Discuss the economic, political and cultural factors of
a country affecting foreign investment• Assess the risk factors in doing business in a foreign
country
Unit 2 Reading:
• Chapter 2 and Chapter 3 in the Hill Text.
Remember, this is an e-book located in your Doc Sharing Area
Unit 2 Class Discussion:
After reading the scenario in which the French firm Confidence Publique, wants to invest in the country of Georgia, do some research on the nation of Georgia and respond to the following questions:
1.What events (political, economic and technological) are the most important in the last 50 years that might have impacted the business culture?
2. What impact do you think these events have had on business and why?
Unit 2 Dropbox Assignment:
After reading in your text: p. 78-82 regarding managerial benefits, risks, costs and advantages.
Use your Globaledge site http://globaledge.msu.edu/resourcedesk/Analyze the political and economic risk factors and write a 1 page paper addressing the following:
1. Compare the economic and political “pros and cons” of investing in the gas industry Bolivia and Venezuela
2. Based on your analysis, explain which country you would start establishing a relationship with as a basis for potential future business in the gas industry and why.
Chapter 2 National Differences in Political
Economy
Unit 2: Culture and Political Economy
The purpose of Unit 2 is to introduce you to differences in various countries’ political, economic and legal systems. The global business person needs to become aware of the changing political economy of many of the world’s nation-states, as well as the cultural diversity and understand the managerial implications.
Political Systems• Collectivism – collective over individual goals• Socialism – state determines production, distribution, in
exchange• Communists – socialism obtained through revolution and
totalitarian dictatorship• Social Democrats – achieve socialism through democratic
means• Democracy – government by the people through elected
representatives• Totalitarianism – one person or party has absolute control
Political Systems cont.
• Representative democracy – citizens elect individuals• Communists totalitarianism • Theocratic Totalitarianism• Tribal totalitarianism• Right-Wing Totalitarianism
Economic systems
• Market Economy• Command Economy• Mixed Economy
Protection of Intellectual Property
• Patents• Copyrights• Trademarks
Legal Systems:
• Three main legal systems in the world today: 1. Common law2.Civil Law3.Theocratic law
Question: How might a country’s legal system affect its economy?
Global Differences:
.
• Many differences exist between nations in these areas:
- Contract law - Individual Property Rights - Public Actions and Corruption - Protection of Intellectual Property - Product Safety and Liability
Development DifferencesDifferent countries have very different Gross National
Income (GNI) Different countries have very different Gross National
Products(GNP) Different countries have very different Purchasing Power
Parity (PPP)
Human Development Index: Measures the capabilities and opportunities a people enjoy (Amaryta Sen)
What is Culture
• A system of values and norms that are shared among a group of people and that when taken together constitute a design for living.
Cultural Differences:
Culture: Shared values and norms of a people.
Determinates: - Religion - Social Structure - Language - Education - Political Philosophy - Economic Philosophy
Culture Change:
• Evolves over time
• Can be slow and painful for a society
• Is impacted by globalization
Question: Can you thing of some examples of this?
Culture and Competitive Advantage
Culture impacts the costs of doing business in a particular country!
Costs of doing business relates directly to the competitiveness of a nation’s businesses.
Question: Can you cite some examples of this?
Any questions ?
It looks like the hour is up. I hope this session was valuable to you and I look forward to seeing you in our next seminar. Have a great week and weekend and see you in the discussion board.
