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the shift toward a more integrated and interdependent world economy
what are the six factors that drive globalization?
- 1. Diminishing distance and communication challenges
- 2. evolving political economies
- 3. recognition of the mutual benefits
- 4. declining barriers to trade
- 5. the development of the multi-national enterprise
- 6. development and support of global institutions
describe political economies
refers to the interdependent nature of the economic, political, and legal systems within a country.
- positive changes in the political economies of many countries have resulted in more mutual receptivity to trade relations with other countries.
Concerning recognizing mutual benefits, describe the free-trade doctrine
The idea that if each country specializes in the production of the goods and services that it can produce most efficiently, this will make the best use of global resources and will result in lower prices.
Concerning declining barriers to trade, describe the reduction of tariffs
- - tariffs are a tax that government imposes on imported goods
- - intended to protect domestic industry and jobs from foreign competition.
General Agreement on Tariffs and Trade.
What resulted as a result of lowering trade barriers
- - Opened enormous opportunities for managers to expand the market for their goods and services
- - Allowed managers to buy and sell goods and services globally
- - Increased intensity of global competition such that managers now have a more dynamic and exciting job of managing.
define multinational enterprise
any business that has productive activities in two or more countries.
what do global institutions do?
- - help manage, regulate, and police the global marketplace
- - promote the establishment of multinational treaties to govern the global business system
ex. GATT, WTO, IMF, World Bank, the UN
define globalization process
the set of specific and general forces that work together to integrate and connect economic, political, and social systems across countries, cultures, or geographical regions so that nations become increasingly interdependent and similar.
define barriers to entry
factors that make it difficult and costly for the organization to enter a particular task environment or industry
the globalization of production
- Firms source goods and services from locations around the globe to capitalize on national differences in the cost and quality of factors of production like land, labor, energy, and capital.
define global outsourcing
the purchase or production of inputs or final products from overseas suppliers to lower costs and improve product quality or design.
define global environment
set of forces and conditions in the world outside the organization's boundaries that affect the way it operates and shapes its behavior.
What are the two forces in the global environment and describe them
- 1. General Env't- The wide-ranging
- global, economic, technological, sociocultural, demographic, political, and
- legal forces that affect an organization and its task environment.
- 2. Task Env't- The set of forces and conditions that originate with suppliers, distributors,
- customers, and competitors and affect an organization’s ability to obtain
- inputs and dispose of its outputs because they influence managers daily
What are the 5 forces under general environment
- 1. Technological Forces- outcomes of changes in the technology that managers use to design, produce, or distribute goods and services.
- 2. Demographic Forces- Outcomes of change in, or changing attitudes toward, the characteristics of a population, such as age, gender, ethnic origin, race, sexual orientation, and social class
- 3. Socioculture Forces- pressures emanating from the social structure of a country or society or from the national culture
- 4. Political and Legal Forces- outcomes of changes in laws and regulations and increased emphasis on environmental protection.
- 5. Economic Forces- interest rates, inflation, unemployment, economic growth, and other factors that affect the general health and well-being of a nation or the regional economy of an organization
what are the 4 forces under task environment
- 1. Competitors- rivalry between competitors is potentially the most threatening force that managers deal with.
- 2. Distributors- powerful distributors can limit access to markets through its control of customers in those markets
- 3. Customers- Identifying an organization's main customers and producing the goods and services they want is crucial to organizational and managerial success
- 4. Suppliers- Access to raw materials, component parts, and labor can be critical in foreign markets.
what are values
- ideas about what a society believes to be good, right, desirable, and beautiful
unwritten, informal codes of conduct that prescribe how people should act in particular situations and are considered important by most members of a group or organization.