Chapter 1: Globalization and International Linkages
Learning Objectives and Chapter Summary
1. ASSESS the implications of globalization for countries, industries, firms, and
communities.
Globalization—the process of increased integration among countries—
continues at an accelerated pace. More and more companies—including those
from developing countries—are going global, creating opportunities and
challenges for the global economy and international management.
Globalization has become controversial in some quarters due to perceptions
that the distributions of benefits are uneven and due to the questions raised by
offshoring. There have emerged sharp critics of globalization among
academics, NGOs, and the developing world, yet the pace of globalization and
integration continues unabated.
2. REVIEW the major trends in global and regional integration.
Economic integration is most pronounced in the triad of North America,
Europe, and the Pacific Rim. The North American Free Trade Agreement
(NAFTA) is turning the region into one giant market. In South America, there is
an increasing amount of intercountry trade, sparked by Mercosur.
Additionally, trade agreements such as the Central American Free Trade
Agreement (CAFTA) are linking countries of the Western Hemisphere
together. In Europe, the expansion of the original countries of the European
Union (EU) is creating a larger and more diverse union, with dramatic
transformation of Central and Eastern European countries such as the Czech
Republic, Poland, and Hungary. Asia is another major regional power, as
reflected in the rapid growth shown not only by Japan, but also the economies
of China, India, and other emerging markets. Countries in Africa and the
,Middle East continue to face complex problems but still hold economic
promise for the future. Emerging markets in all regions present both
opportunities and challenges for international managers.
,3. EXAMINE the changing balance of global economic power and trade and
investment flows among countries.
Different growth rates and shifting demographics are dramatically altering the
distribution of economic power around the world. Notably, China’s rapid
growth will make it the largest economic power in the world by midcentury, if
not before. India will be the most populous country in the world, and other
emerging markets will also become important players. International trade and
investment have been increasing dramatically over the years. Major
multinational corporations (MNCs) have holdings throughout the world, from
North America to Europe to the Pacific Rim to Africa. Some of these holdings
are a result of direct investment; others are partnership arrangements with
local firms. Small firms also are finding that they must seek out international
markets to survive in the future. MNCs from emerging markets are growing
rapidly and expanding their global reach. The internationalization of nearly all
business has arrived.
4. ANALYZE the major economic systems and recent developments among
countries that reflect those systems.
Different economic systems characterize different countries and regions.
These systems, which include market, command, and mixed economies, are
represented in different nations and have changed as economic conditions
have evolved.
The World of International Management: An Interconnected
World
1. Summary:
The opening vignette discusses and highlights how social networks, such as
, Facebook YouTube, and Twitter, are revolutionizing the way people and
companies interact and communicate with each other. Social networks offer
companies an inexpensive, yet highly effective means of reaching their target
audiences across the globe. In fact, social networks are rewriting the rules for
marketing. Consumers today can quickly and easily get information about
products and services from trusted friends via social media and bypass more
traditional methods of gathering information. Companies must identify ways
to adapt to, and capitalize on, this new marketing reality.
Social media also impacts diplomacy. Various high-profile people have
spearheaded social causes vis Twitter, thus aiding the efforts of governments
to influence other nations. Such globalization through social networks, which
extends to businesses, brings populations of the world closer together and
accelerates integration.
Learning Objectives and Chapter Summary
1. ASSESS the implications of globalization for countries, industries, firms, and
communities.
Globalization—the process of increased integration among countries—
continues at an accelerated pace. More and more companies—including those
from developing countries—are going global, creating opportunities and
challenges for the global economy and international management.
Globalization has become controversial in some quarters due to perceptions
that the distributions of benefits are uneven and due to the questions raised by
offshoring. There have emerged sharp critics of globalization among
academics, NGOs, and the developing world, yet the pace of globalization and
integration continues unabated.
2. REVIEW the major trends in global and regional integration.
Economic integration is most pronounced in the triad of North America,
Europe, and the Pacific Rim. The North American Free Trade Agreement
(NAFTA) is turning the region into one giant market. In South America, there is
an increasing amount of intercountry trade, sparked by Mercosur.
Additionally, trade agreements such as the Central American Free Trade
Agreement (CAFTA) are linking countries of the Western Hemisphere
together. In Europe, the expansion of the original countries of the European
Union (EU) is creating a larger and more diverse union, with dramatic
transformation of Central and Eastern European countries such as the Czech
Republic, Poland, and Hungary. Asia is another major regional power, as
reflected in the rapid growth shown not only by Japan, but also the economies
of China, India, and other emerging markets. Countries in Africa and the
,Middle East continue to face complex problems but still hold economic
promise for the future. Emerging markets in all regions present both
opportunities and challenges for international managers.
,3. EXAMINE the changing balance of global economic power and trade and
investment flows among countries.
Different growth rates and shifting demographics are dramatically altering the
distribution of economic power around the world. Notably, China’s rapid
growth will make it the largest economic power in the world by midcentury, if
not before. India will be the most populous country in the world, and other
emerging markets will also become important players. International trade and
investment have been increasing dramatically over the years. Major
multinational corporations (MNCs) have holdings throughout the world, from
North America to Europe to the Pacific Rim to Africa. Some of these holdings
are a result of direct investment; others are partnership arrangements with
local firms. Small firms also are finding that they must seek out international
markets to survive in the future. MNCs from emerging markets are growing
rapidly and expanding their global reach. The internationalization of nearly all
business has arrived.
4. ANALYZE the major economic systems and recent developments among
countries that reflect those systems.
Different economic systems characterize different countries and regions.
These systems, which include market, command, and mixed economies, are
represented in different nations and have changed as economic conditions
have evolved.
The World of International Management: An Interconnected
World
1. Summary:
The opening vignette discusses and highlights how social networks, such as
, Facebook YouTube, and Twitter, are revolutionizing the way people and
companies interact and communicate with each other. Social networks offer
companies an inexpensive, yet highly effective means of reaching their target
audiences across the globe. In fact, social networks are rewriting the rules for
marketing. Consumers today can quickly and easily get information about
products and services from trusted friends via social media and bypass more
traditional methods of gathering information. Companies must identify ways
to adapt to, and capitalize on, this new marketing reality.
Social media also impacts diplomacy. Various high-profile people have
spearheaded social causes vis Twitter, thus aiding the efforts of governments
to influence other nations. Such globalization through social networks, which
extends to businesses, brings populations of the world closer together and
accelerates integration.
