Test Bank
Globalization
Ch. Outline
OPENING CASE: The_ Globalization of Production at Boeing
INTRODUCTION
WHAT IS GLOBALIZATION?
The_ Globalization of Markets
The_ Globalization of Production
Management Focus: Vizio and the_ Market for Flat Panel TVs
THE_ EMERGENCE OF GLOBAL INSTITUTIONS
DRIVERS OF GLOBALIZATION
Declining Trade and Investment Barriers
The_ Role of Technological Change
THE_ CHANGING DEMOGRAPHICS OF THE_ GLOBAL ECONOMY
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The_ Changing World Output and World Trade Picture
Country Focus: India’s Software Sector
The_ Changing Foreign Direct Investment Picture
The_ Changing Nature of the_ Multinational Enterprise
Management Focus: China’s Hisense – An Emerging Multinational
The_ Changing World Order
The_ Global Economy of the_ Twenty-First Century
THE_ GLOBALIZATION DEBATE
Antiglobalization Protests
Country Focus: Protesting Globalization in France
Globalization, Jobs, and Incomes
Globalization, Labor Policies, and the_ Environment
Globalization and National Sovereignty
Globalization and the_ World’s Poor
MANAGING IN THE_ GLOBAL MARKETPLACE
CRITICAL THINKING AND DISCUSSION QUESTIONS
CLOSING CASE: Who Makes the_ Apple iPhone?
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Learning Objectives
1. Understand what is meant by the_ term globalization.
2. Recognize the_ main causes of globalization.
3. Describe the_ changing nature of the_ global economy.
4. Explain the_ main arguments in the_ debate over the_ impact of globalization.
5. Understand how the_ process of globalization is creating opportunities and challenges for
business managers.
Ch. Summary
This opening ch. introduces the_ reader to the_ concepts of globalization and international trade, and
provides an introduction to the_ major issues that underlie these topics. The_ components of
globalization are discussed, along with the_ drivers of globalization and the_ role of the_ General
Agreement on Tariffs and Trade (GATT) and its successor the_ World Trade Organization (WTO) in
lowering trade barriers. The_ influence of technological change in facilitating globalization is also
discussed, along with the_ role of multinational firms in international business.
The_ ch. also describes the_ changing demographics of the_ global economy, with a special
emphasis on the_ increasingly important role of developing countries in world trade. This discussion
is complemented by a description of the_ changing world order, which was brought on by the_
collapse of communism in Eastern Europe and republics of the_ former Soviet Union. The_ ch. ends
with a candid overview of the_ pros and cons of the_ trend towards globalization.
Opening Case: The_ Globalization of Production at Boeing
3
, Test Bank
Summary
The_ opening case explores U.S. aircraft manufacturer Boeing’s approach to the_ production of its
Dreamliner 787 airplane. Boeing’s strategy was unlike any of its previous strategies. Instead of
producing much of the_ aircraft itself, Boeing, noting that 80 percent of its customers were foreign
airlines, decided to outsource some 65 percent of the_ value of the_ Dreamliner to suppliers located
around the_ world. This strategy introduced a number of challenges for Boeing, and production of
the_ 787 was often delayed. A discussion of the_ case can revolve around the_ following questions:
QUESTION 1: Reflect on Boeing’s decision to outsource much of the_ production of the_ Dreamliner
787. What benefits does this strategy offer? Are there any drawbacks?
THE_ANSWER 1: Boeing has traditionally outsourced some of the_ production of its aircraft, but it
took outsourcing to a new level with the_ Dreamliner 787, outsourcing 65 percent of its value to
suppliers located around the_ world. This strategy allowed each company including Boeing to focus
on what it does best, allowing for greater efficiency and lower costs. Some students may also
suggest that by using suppliers located in customer countries, Boeing was able to introduce a “local”
element to the_ Dreamliner and gain goodwill with its customers. However, with its new strategy,
Boeing also encountered many problems including challenges in coordinating its globally dispersed
production chain. Production was frequently delayed and the_ aircraft was ready for sale much later
than Boeing had anticipated. Some students may note that while Boeing was able to benefit from
the_ expertise of its suppliers, by outsourcing, the_ company also lost the_ ability to increase its own
knowledge and skills.
QUESTION 2: How has globalization made Boeing’s approach to the_ production of the_ Dreamliner
possible?
THE_ANSWER 2: Students should recognize the_ importance of technology that facilitated Boeing’s
strategy to outsource much of its Dreamliner 787 aircraft to suppliers located around the_ globe.
Some students might also point out that open markets and free trade were also important to the_
easy movement of parts from country to country. Other students might note that globalization has
allowed for the_ creation of a more skilled workforce in many countries – something that was also
important to Boeing.
4
Globalization
Ch. Outline
OPENING CASE: The_ Globalization of Production at Boeing
INTRODUCTION
WHAT IS GLOBALIZATION?
The_ Globalization of Markets
The_ Globalization of Production
Management Focus: Vizio and the_ Market for Flat Panel TVs
THE_ EMERGENCE OF GLOBAL INSTITUTIONS
DRIVERS OF GLOBALIZATION
Declining Trade and Investment Barriers
The_ Role of Technological Change
THE_ CHANGING DEMOGRAPHICS OF THE_ GLOBAL ECONOMY
1
,Test Bank
The_ Changing World Output and World Trade Picture
Country Focus: India’s Software Sector
The_ Changing Foreign Direct Investment Picture
The_ Changing Nature of the_ Multinational Enterprise
Management Focus: China’s Hisense – An Emerging Multinational
The_ Changing World Order
The_ Global Economy of the_ Twenty-First Century
THE_ GLOBALIZATION DEBATE
Antiglobalization Protests
Country Focus: Protesting Globalization in France
Globalization, Jobs, and Incomes
Globalization, Labor Policies, and the_ Environment
Globalization and National Sovereignty
Globalization and the_ World’s Poor
MANAGING IN THE_ GLOBAL MARKETPLACE
CRITICAL THINKING AND DISCUSSION QUESTIONS
CLOSING CASE: Who Makes the_ Apple iPhone?
2
,Test Bank
Learning Objectives
1. Understand what is meant by the_ term globalization.
2. Recognize the_ main causes of globalization.
3. Describe the_ changing nature of the_ global economy.
4. Explain the_ main arguments in the_ debate over the_ impact of globalization.
5. Understand how the_ process of globalization is creating opportunities and challenges for
business managers.
Ch. Summary
This opening ch. introduces the_ reader to the_ concepts of globalization and international trade, and
provides an introduction to the_ major issues that underlie these topics. The_ components of
globalization are discussed, along with the_ drivers of globalization and the_ role of the_ General
Agreement on Tariffs and Trade (GATT) and its successor the_ World Trade Organization (WTO) in
lowering trade barriers. The_ influence of technological change in facilitating globalization is also
discussed, along with the_ role of multinational firms in international business.
The_ ch. also describes the_ changing demographics of the_ global economy, with a special
emphasis on the_ increasingly important role of developing countries in world trade. This discussion
is complemented by a description of the_ changing world order, which was brought on by the_
collapse of communism in Eastern Europe and republics of the_ former Soviet Union. The_ ch. ends
with a candid overview of the_ pros and cons of the_ trend towards globalization.
Opening Case: The_ Globalization of Production at Boeing
3
, Test Bank
Summary
The_ opening case explores U.S. aircraft manufacturer Boeing’s approach to the_ production of its
Dreamliner 787 airplane. Boeing’s strategy was unlike any of its previous strategies. Instead of
producing much of the_ aircraft itself, Boeing, noting that 80 percent of its customers were foreign
airlines, decided to outsource some 65 percent of the_ value of the_ Dreamliner to suppliers located
around the_ world. This strategy introduced a number of challenges for Boeing, and production of
the_ 787 was often delayed. A discussion of the_ case can revolve around the_ following questions:
QUESTION 1: Reflect on Boeing’s decision to outsource much of the_ production of the_ Dreamliner
787. What benefits does this strategy offer? Are there any drawbacks?
THE_ANSWER 1: Boeing has traditionally outsourced some of the_ production of its aircraft, but it
took outsourcing to a new level with the_ Dreamliner 787, outsourcing 65 percent of its value to
suppliers located around the_ world. This strategy allowed each company including Boeing to focus
on what it does best, allowing for greater efficiency and lower costs. Some students may also
suggest that by using suppliers located in customer countries, Boeing was able to introduce a “local”
element to the_ Dreamliner and gain goodwill with its customers. However, with its new strategy,
Boeing also encountered many problems including challenges in coordinating its globally dispersed
production chain. Production was frequently delayed and the_ aircraft was ready for sale much later
than Boeing had anticipated. Some students may note that while Boeing was able to benefit from
the_ expertise of its suppliers, by outsourcing, the_ company also lost the_ ability to increase its own
knowledge and skills.
QUESTION 2: How has globalization made Boeing’s approach to the_ production of the_ Dreamliner
possible?
THE_ANSWER 2: Students should recognize the_ importance of technology that facilitated Boeing’s
strategy to outsource much of its Dreamliner 787 aircraft to suppliers located around the_ globe.
Some students might also point out that open markets and free trade were also important to the_
easy movement of parts from country to country. Other students might note that globalization has
allowed for the_ creation of a more skilled workforce in many countries – something that was also
important to Boeing.
4
