Globalization refers to the shift toward a more integrated and interdependent world economy.
Globalization of markets- national markets are merging into one huge marketplace.
Globalization of production- firms are basing individual productive activities at the optimal world locations for the particular activities.
Factors of production: labor, energy, land, capital
*Factors leading to the trend of globalization: declining trade barriers and changes in communication information and transportation technology free flow of goods services and capital have lowered since WW2
Consequence of globalization of P and M- world trade has grown faster than world output, FMI has surged, competitive pressure
World trade organization is primarily responsible for policing the world trading system and making sure nation states adhere to the rules
International monetary fund maintain order in international monetary system
World Bank set up to promote economic development
United nations- committed to preserving peace through international cooperation and collective security, harmonize.
*Foreign direct investment (FDI) occurs when a firm invests resources in business activities outside its home country. Barriers of high tariffs led to the great depression
Moores law- the power of the microprocessor technology doubles and it’s getting cheaper to produce. Helped firm’s link worldwide operations into sophisticated info networks. Results in the cost of global communications plummets
-since 1960 the US has dropped for 38% share of the world’s output to 8% in 2011
1990’s faced new competition from Japanese and European multinationals.
Fall of communism in eastern Europe- created opportunities for international business.
Multination enterprises are companies with two productive activities in two or more countries.
They are also international businesses-any company that does business with another country.
*Debate if global economy is best? Focus on the impact of globalization on jobs, wages, the environment, work conditions and national sovereignty.
*Managing international business Countries are different Range of problems confronted by a manager is wider, more complex Work with limits set by Gov intervention in international trade Converting money
Case study-legal outsourcing
Quiz: National sovereignty concerns raised by critics of globalization include: unelected bureaucrats now impose policies on democratically elected governments of nation-states
Focuses on how the political economic and legal systems of countries differ.
Polical economy- stress that the political economic and legal syatems are interdependent they influence each other.
Political system- form of government in a nation degree to which tthey emphasize collectivism as opposed to individualism Degree to which they are democratic or totalitarian
*Collectivism stresses the primacy of collective goals, like the needs of society as a whole (Plato-the republic)
Socialists-trace their roots to karl marx, few benefit at the expense of many in a capitalist society. The idea is to manage state owned enterprise to bemefit society as a whole, rather than individual capitalists. Public ownership
Communists belive that socialism could be achieved only through violent revolution and totalitarian dictatorship. Social democrats were the opposite
*Individualism philosophy that an individual should have freedom in his economic and political pursuits the interests of individual>state Platos disciple Aristotle
*Democracy- government is by the people exercised directly or through elected representatives.
*Totalitarianism- form of government in which one person or political party exercises absolute control over all spheres of human life and prohibits opposing political party.
Theoretic- political power monopolized by a group or individual that governs according to religious principles
Tribal-party or individual represents the