Introduction

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Author:
Lamies10
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122768
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Introduction
Updated:
2011-12-11 16:55:45
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  1.  Globalization
    The shift towards a more integrated and interdependent world economy 
  2. The globalization of markets
    The merging of distinct national markets into one huge global marketplace
  3. The globalization of production
    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
  4. Proponents of globalization
    • Free trade results in greater efficiency/innovaiton - the whole economy is better off
    • Reduction of poverty in less developed economies
    • Lower prices for goods and services
    • Free trade results in economic progress and tougher environmental regulations and stricter labor standard
    • Bodies such as United Nations and the WTO exist to serve the collective interests of member states - not subvert them
  5. Critics of globalization
    • Destroys manufacturing jobs in wealthy advanced countries
    •  Creates income inequality and social problems
    •  Wage rates of unskilled workers in advanced countries declines
    • Manufacturing done in less developed countries that lack adequate regulations to protect labor and environment
    • Unelected bureaucrats impose policies on nation-states, undermining sovereignty
  6. Traditional motivations of international diversification
    • Use underemployed resources
    • Seek new markets
    • Secure key supplies
    • Exploit firm specific assets 
    • Access low cost factors
    • Benefit from government investment subsidies
    • Lower risks
  7. Emerging motivations
    • Increasing minimum efficient scale and economies of scale
    • Escalating R&D costs and shorter product life cycles Protect domestic markets
    • Seek “knowledge” 
    • Follow competitors; Competitive positioning
  8. RESOURCE SEEKING
    • -Availability, price and quality of natural resources
    • -Infrastructure to enable resources to be exploited
    • -Investment incentives (e.g., tax holiday
  9. EFFICIENCY SEEKING
    • Mainly production cost related factors
    • Removal of obstacles by government
    • Availability of specialized clusters (e.g., science and industrial parks)
  10. MARKET SEEKING
    • Large, growing markets Transportation costs; tariff barriers
    • Need to be closer to users 
    • Macroeconomic policies pursued by host governments
  11. STRATEGIC ASSET SEEKING
    • Availability of knowledge-related assets 
    • Institutional factors influencing ease or difficulty by which assets can be acquired
  12. Managerial Tasks in a global environment
    • Ensure that their company leads the industry in identifying and pursuing market opportunities worldwide
    • Work relentlessly to convert global presence into global competitive advantage
    • Cultivate a global mindset
    • Strive to constantly reinvent the rules of the global game

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