Management Chapter 3

Refers to the extent to which trade and investments,information,social and cultural ideas, and political cooperation flow between countries.

exporting is the act of a company maintaing its production facilities within the home nation and transfers its products for sale in foreign countries. Exporting enables a company to market its products in other countries at a modest resource cost and with limited risk.

refers to the barter of products for products rather than sales of products for currency.

Also called outshoring, means engaging in the international division of labor so that work activities can be done in countries with the cheapest sources of labor and supplies.

Examples: Low level jobs: textile manufacturing , call center operations, and credit card processing have been outsourced to low wage countries.

Internet has and new technology has allowed more highlevel jobs out be outsourceced as well I.e person may have a MRI done in america but have a doctor in India look analyize the findings.

The act of developing markets for finished products or services outside their home countries, which may include exporting, licensing, and direct investing.

many companies are going to china and india, business is booming

china manufactures an ever growing percentage of u.s products

china represents a major market although doing business there is not easy

india is growing in software design, services and engineering

is the management of business operations conducted in more then one company.

the fundamental task of business management does not change in any substantive way when a firm is working  

Companies classify countries as less developed by their per capita income which is income generated by the nation's production of goods and services divided by total population.

• Economic development 
•  Countries are either developed or developing

• Resource and Product Markets
•   Companies must evaluate the market demand for their products

• Economic Interdependence
•   It has become more obvious that countries are connected by events across the globe i.e u.s relies on saudi arabia for oil. China relies on U.S for food. U.S relies on china for Money.

One important factor in gauging competitiveness is the country's infrastructure, that is, the physical facilities such as highways, airports, utilities, and telephone lines that support economic activites.

When managing buisness in multiple countries, managers must be aware of political risk

i.e land,equipment, and plants could be seized in countries like Venezula

if a company dosent like your company they could take it away.

Political Risk is defined as the risk of lost assets, earning power, or managerial control.

Managers must be concerned with the political instability of global markets.

a frequent problem cited by international companies is political instability which includes riots , revolutions, civil disorders and frequent change in government.


areas that fit into these categories are not good places to operate business.

Geert Hofstede identified four dimensions of national value systems that influence organizational and employee working relationships. 

1.Power distance. High power distance means that people accept inequality in power among institutions ,organizations, and people. Low power distance means that people

the values and behaviors that govern u.s. business do not always translate in the international environment 

  Social Values

  Communication Differences

•   Other Cultural Characteristics
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Are regional trading alliances and international trade agreements.

-23 nations in 1947, a set of rules for fair trade

These rules allowed lesser developed countries in the GATT to trade fairly with other countries.

This concept proposes that corporations can alleviate poverty as well as make significant profits by selling to the world's poorest.

Examples of this is selling: water and electricity

Another example of this is NOkia.

Nokia is a company who has not done well in the high end cell phone market (think 1999)

but has made a profit in selling cellphones to people in places like Africa.

53% of America belive free trade has hurt the United States

The United States' primary