288 33 powerpoint-slides_chapter-1-globalization-international-business
288 33 Powerpoint Slides Chapter 1 Globalization International Business
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Transcript of 288 33 Powerpoint Slides Chapter 1 Globalization International Business
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
International BusinessInternational Business
Rakesh Mohan Joshi Rakesh Mohan Joshi
Professor & Chairperson, IIFT New DelhiProfessor & Chairperson, IIFT New Delhi
1
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
GLOBALIZATION ANDGLOBALIZATION AND
INTERNATIONAL INTERNATIONAL
BUSINESS BUSINESS
Chapter 1
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Learning ObjectivesLearning Objectives
To explain the concept of globalization To explain the concept of globalization
To elucidate factors influencing globalization To elucidate factors influencing globalization
To discuss global business expansion strategy for emerging To discuss global business expansion strategy for emerging
market companiesmarket companies
To explicate the concept of international businessTo explicate the concept of international business
To delineate motives for international business expansionTo delineate motives for international business expansion
To expound the strategy for managing business in the To expound the strategy for managing business in the
globalization eraglobalization era
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Globalization of Business: A Historical Perspective
In the initial years of human history, there were hardly
any formal barriers, such as tariffs or non-tariff
restrictions, for the movement of goods or visa
requirements for the people. The concept of
globalization can be traced back to the phenomenon of a
nation-state.
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Concept of GlobalizationConcept of Globalization
The process of integration and convergence of The process of integration and convergence of
economic, financial, cultural and political economic, financial, cultural and political
systems across the world.systems across the world.
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Globalization: A Holistic Approach Globalization: A Holistic Approach
Economic Globalization Economic Globalization
The increasing integration of national economic systems through The increasing integration of national economic systems through
growth in international trade, investment and capital flows.growth in international trade, investment and capital flows.
Financial Globalization Financial Globalization
The liberalization of capital movements and deregulations, The liberalization of capital movements and deregulations,
especially of financial services that led to a spurt in cross-border especially of financial services that led to a spurt in cross-border
capital flows.capital flows.
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Cultural GlobalizationCultural GlobalizationConvergence of cultures across the world.Convergence of cultures across the world.
Political GlobalizationPolitical Globalization
Convergence of political systems and processes around Convergence of political systems and processes around
the world. the world.
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Dimensions of Economic GlobalizationDimensions of Economic Globalization
Globalization of productionGlobalization of production
Globalization of marketsGlobalization of markets
Globalization of competitionGlobalization of competition
Globalization of technologyGlobalization of technology
Globalization of corporations and industries Globalization of corporations and industries
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Factors Influencing GlobalizationFactors Influencing Globalization
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Movers of GlobalizationMovers of Globalization Economic liberalization Economic liberalization
Technological breakthroughTechnological breakthrough
Multilateral institutionsMultilateral institutions
International economic integrationsInternational economic integrations
Move towards free marketing systemsMove towards free marketing systems
Rising research & development costs Rising research & development costs
Global expansion of business operationsGlobal expansion of business operations
Advents in logistics managementAdvents in logistics management
Emergence of the global customer segment Emergence of the global customer segment
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Factors Restraining GlobalizationFactors Restraining Globalization
Regulatory controlsRegulatory controls
Emerging trade barriersEmerging trade barriers
Cultural factorsCultural factors
NationalismNationalism
War and civil disturbancesWar and civil disturbances
Management myopiaManagement myopia
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Measuring Globalization Measuring Globalization
Trade OpennessTrade Openness
KOF Index of GlobalizationKOF Index of Globalization
A.T. Kearney/ Foreign Policy Globalization A.T. Kearney/ Foreign Policy Globalization
Index Index
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Reasons for Support of Globalization Reasons for Support of Globalization
Maximization of Economic EfficienciesMaximization of Economic Efficiencies
Enhancing TradeEnhancing Trade
Increased Cross-border Capital MovementIncreased Cross-border Capital Movement
Improves Efficiency of Local FirmsImproves Efficiency of Local Firms
Increases Consumer WelfareIncreases Consumer Welfare
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Criticism of GlobalizationCriticism of Globalization
Developed versus Developing Countries: Unequal Players in Developed versus Developing Countries: Unequal Players in Globalization:Globalization:
Widening Gap between the Rich and the PoorWidening Gap between the Rich and the Poor Wipes out Domestic IndustryWipes out Domestic Industry Leads to Unemployment and Mass Lay-offsLeads to Unemployment and Mass Lay-offs Brings in Balance of Payments ProblemsBrings in Balance of Payments Problems Increased Volatility of MarketsIncreased Volatility of Markets Diminishing Power of Nation States Diminishing Power of Nation States Loss of Cultural IdentityLoss of Cultural Identity Shift of Power to Multinationals Shift of Power to Multinationals
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Response Strategies to Globalization Forces for Response Strategies to Globalization Forces for Emerging Market CompaniesEmerging Market Companies
Defender Defender
ExtenderExtender
Dodger Dodger
Contender Contender
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Concept of International BusinessConcept of International Business
International Trade:International Trade: Exports of goods and services by a firm Exports of goods and services by a firm
to a foreign-based buyer (importer)to a foreign-based buyer (importer)
International MarketingInternational Marketing:: It focuses on the firm-level It focuses on the firm-level
marketing practices across the border, including market marketing practices across the border, including market
identification and targeting, entry mode selection, and identification and targeting, entry mode selection, and
marketing mix and strategic decisions to compete in marketing mix and strategic decisions to compete in
international markets.international markets.
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
International Investments: International Investments: Cross-border transfer of Cross-border transfer of
resources to carry out business activities.resources to carry out business activities.
International ManagementInternational Management:: Application of management Application of management
concepts and techniques in a cross-country environment and concepts and techniques in a cross-country environment and
adaptation to different social-cultural, economic, legal, adaptation to different social-cultural, economic, legal,
political and technological environments.political and technological environments.
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
International Business: International Business: All those business activities which All those business activities which
involves cross border transactions of goods, services, and involves cross border transactions of goods, services, and
resources between two or more nations resources between two or more nations
Global BusinessGlobal Business:: Conduct of business activities in several Conduct of business activities in several
countries using a highly co-ordinated and single strategy countries using a highly co-ordinated and single strategy
across the world.across the world.
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Reasons for International Business Reasons for International Business ExpansionExpansion
Market-Seeking MotivesMarket-Seeking Motives
• Marketing opportunities due to life cyclesMarketing opportunities due to life cycles
• Uniqueness of product or serviceUniqueness of product or service
Economic MotivesEconomic Motives
• Profitability Profitability
• Achieving economies of scaleAchieving economies of scale
• Spreading R&D costsSpreading R&D costs
Strategic MotivesStrategic Motives
• Growth Growth
• Risk spread Risk spread
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Differences Between Domestic and Differences Between Domestic and International BusinessInternational Business
Economic EnvironmentEconomic Environment
Socio-Cultural Environment Socio-Cultural Environment
Legal EnvironmentLegal Environment
Political Environment Political Environment
Competition Competition
InfrastructureInfrastructure
Technology Technology
Chapter 1: Globalization and Chapter 1: Globalization and International BusinessInternational Business
Copyright @ Oxford University Press Copyright @ Oxford University Press International Business R. M. JoshiInternational Business R. M. Joshi
Managing Business in the Globalization Era
Global strategies adopted by business enterprises may include:
• Global conception of markets
•Multi-regional integration strategy
•Changes in external organisation of multinational firms
•Changes in internal organisation