MGT 4600 Final.docx

MGT 4600 F Mgt 4600 Final MGT 4600 Final Chapter 1: Increase in expansion of technology because the more advanced and available technology is to the developing world; the more competitive they are allowed to become. Growing consumer pressures because global discretionary has risen to the point that there is now widespread demand for products and services that would have been considered luxuries in the past. Increased global competition because incomes have grown globally and more consumers have satisfied their needs. So companies must develop what they believe customers will want. Changing political situations is major reason for growth because of the end of the schism between most Communist and non-Communist countries. Chapter 2: Cultural collisions that happen between international businesses and the countries that they attempt to start their businesses in. A company implements practices that work less well than intended. Social Stratification Systems because every culture values some things and people differently than other regions of the earth do. Information and task processing is important because some cultures tend to focus on the whole and then on the parts, whereas others do the opposite. Chapter 3: Individualism is important because it describes which refers to the primacy of the rights and role of the individual. Many western cultures follow this ideology which makes it difficult to transition to different places that clash with this characteristic. Collectivism is important because it refers to the primacy of the rights and role of the community. More Eastern cultures have adopted this style of behavior. International businesses have to adjust to these believes to be able to satisfy the wants and needs of their customers. Political ideology is the collection of ideas that expresses the goals, theories, and aims that constitute a sociopolitical program. The level of democracy and totalitarian society also make a great difference in how businesses are allowed to operate in certain nations across the globe. It affects their import/export rates, tariffs, and taxes which can be vital to a company’s feasible survival on an international scale. Chapter 4: Debt is important because it needs to be monitored, so that it doesn’t negatively affect the ability to borrow money if needed. Financial stats like GNI, growth rate, and PPP are important because these numbers dictate a country’s level of productivity and development. Global poverty needs to be considered because of the discrepancies in the amount of people versus the amount of rich people. It is very possible that the middle class could dissolve into creating even more people. Disposable income will be directly affected by this development. Chapter 5: Impact of FDI because it has come to be seen as a major contributor to growth and development, bringing capital, management expertise, technology, jobs, and wealth. The growing prevalence of FDI requires a better understanding of the views of home and host countries. Impact of MNE are important because MNEs may affect some countries’ balance-of-payments, growth, and employment objectives more than ever as time goes on. Ethical behavior becomes more valuable because as managers we face dilemmas on what we should do to be ethical and socially responsible. Internationally, the dilemmas are even greater. Bribery definitely is a possible threat because it influences the performance of countries and companies. Higher levels of corruption are strongly associated with lower growth and lower levels of per capita income. Chapter 6: Overpopulation needs to be monitored because it is obvious scientifically that we are on the brink of over populating the world. Only bad can come from that if it reaches past the point where the Earth can natural balance things out. Trade Regulations are very vital to international trade because home countries can in a sense, decide the financial fate of some if not most countries that choose to operate in their region. Imports vs. Homegrown products begin to take its affect because some start to believe the more a country relies on foreign products that their own economy will collapse. This helps many customers decide what products to buy. Chapter 7: The Multi-fiber Arrangement of 1974 because it rose prices due to tariffs. It harmed the competitive position of China and India. On the other hand it helped out Bangladesh and Indonesia greatly. Industrialization Argument because it unregulated importation of lower-priced products prevents development of the domestic industry. Manufacture industry grows faster than agricultural. Infant-Industry Argument relates because it discusses whether or not the government should shield an emerging industry from foreign competitors. Guarantee them a large share of the domestic market until able to compete on their own. Essential-Industry Argument is important because the governments apply trade restrictions to protect essential domestic industries during a peacetime so it is not dependent on foreign sources of supply during war. Chapter 8: Effects of Integration should be considered because of how it shifts production to more efficient producers. Trade then shifts to countries in the group and not to the ones no longer part of the group. NAFTA has created the largest bilateral flow of goods which was from the United States to Canada. Concern for American workers grew because of the lower wages in Mexico. Organization of Petroleum Exporting Countries was an alliance to keep oil prices high with the addition of quotas. Invasion of Kuwait was a result of this. World Trade Organization has 150 members that make up more than 97% of world trades. They had to get rid of the most-favored-nation clause the GATT. Chapter 9: Foreign-Exchange Convertibility decides what currencies are hard or soft. Soft currencies are mostly made up of developing countries. Eurocurrencies occur when people use banks outside their home country to keep money. How does that affect the home countries banks not having that money? Interest Arbitrage is the investment of money in another country then converted back to original currency for a profit. A lot of people disagree with this form of investment. Internet Trading of Currency becoming more popular with the advancements in technology. How safe could that become with how many people have the access to the internet? Chapter 10: Exchange rate should we have our own currency in America or should we be converted to the euro. If everyone had their own currency there would be no single monetary policy. Black Markets are not involved with the government. They usually tend to sell things at a higher price than the government would see it at (illegal). Business Implications of Exchange Rate Changes can affect companies marketing, production, and financial decisions. Exchange rates can affect demand of a product, operating expenses, financial resources. International Monetary Fund balance growth of international trade, promote exchange-rate stability, and multilateral system of payments. It can be fixed or pegged to another currency. Chapter 11: Perfect Competition buyers and sellers can be such that no individual affects price or quantities. Perfect information for both producers and consumers Industry Changes competitors moves, government policies, changes in industry economics. Companies struggle when it comes to changes, how they react to these are debatable Low cost leadership and differentiation is important because it does to the company and how it affects them (leaders in the industry and they make a lot of money). These strategies are created by the managers that need to assess the company’s present situation, identify the direction the company should go, and determine how the company will get there… This could be hard at times Chapter 12: Insufficient resources cause two major problems: 1) which markets to serve, and 2) where to locate the production to serve those markets. Decisions on market and production are interdependent because companies often need to serve markets from local production and because they want to use existing production capacity. Risk of liability of foreignness occurs in first moving countries more similar to their home countries. Second, may contract with experienced companies to handle operations for hem, limit the resources they commit to foreign operations, and delay entry to many counties until they are operating successfully in one or a few. Published data is the amount, accuracy, and timeliness are vary substantially among countries, managers should be aware of this. The cost and specificity of these publications are vary widely, should a company have a set price. Allocating resources happen when companies need to consider how to treat reinvestments and divestments, the interdependence of operations in different countries, and whether they should follow diversification versus concentration strategies. Part 2: In my opinion the author does a very nice job at expressing his distaste for free trade and globalization with substantial support. He explains how everyone is so caught up being in agreeance with these universal trends because of how we forget the fundamentals which will ultimately be the downfall of these movements. He illustrates this by referring to everyone’s thoughts on comparative advantage as “the concept of a kaleidoscope”. He begins with his opinion of what comparative advantage exactly means. He basically sums up comparative advantage as a concept with a really short shelf life. It will be very affective in the short term, but over time it will be clear who the clear advantage will go to. The author then moves in the direction of globalization and why he thinks increased trade will have labor market consequences. He makes the point that with trade being so open that it will have a huge impact on the power of local communities. Since supplies and resources can become available anywhere that the local communities lose control that they have over what comes in and out of their own environments. He also mentions the obvious parts of globalization; like how it leads to more transportation being necessary which leads to more pollution. The problem of multinationals trying to “harmonize” the regions in which their companies operate being a bad idea is mentioned next. This is because of how what works in more developed countries might not be as malleable in lesser developed countries. He then stresses the importance technology plays in globalization. Most economies are dependent on whether or not they have access or not to cutting edge technology. Technology that can develop new products and keep pushing the agenda of innovation for new revenue is essential to an economy growing. The ugliest part of globalization is how it is looked upon that the more developed countries keep certain technologies from the Third World or regulate their usage. For instance, there is the “Nuclear Club”, group of country that has nuclear weaponry, this group is very parsimonious with allocating equal power to lesser developed countries. They use the idea of those countries not being able to be trusted because of their potential as terrorist threats as reason for their treatment. Some would say this is front to keep all the power out of the up and coming economies with vast population growth. I can’t say that I fully agree with his stance on free trade. For the very simple reason is that I belive the potential good outweighs the bad. I think allowing lesser developed countries do business with more developed companies allows for those less fortunate regions to be allowed to compete and be involved in global businesses. Their experiences gained dealing with multinationals might be enough to help guide them in establishing their own economies. I do agree with the fact that globalization definitely is skewed towards the richer countries. Its cause they have all the power, but if it were not to exist(globalization) I think the potential for growth in those Third World countries would be even lower. I also agree with how important technology is in the role of the world becoming more globalized. To me it lies in the disbursement of information. The regulation of filtered information that the lesser developed countries is their largest detriment in my opinion. If they were allowed access to the same information in the same manner that we are; maybe they could be able to be build their economies in more independent and innovative ways. The fact that their access is limited and filtered plays right in the hands of the argument I posted above. It makes sense to keep what you know from others as it ties back into the author’s argument of comparative advantage. Of course it’s an advantage but will pacify most in the short term.