L2 How Global is the World

Prof AJ Smit (UNISA)

Index Leadership in practice

End Topic

Globalisation (Ch1)

Global Trade and Finance

Formal and Informal Rules of the Game (Ch 2-4) Institutions, Culture and Ethics

Global Business

The Global Business

Environment

Go Global Why, Where, When How

(Ch12)

Global Strategies What (Ch 11)

Global Architecture How

Functional Excellence (Ch 13-16) HR, Marketing, Operations and Finance

Managing Across

Borders

The Global Financial System Ch 9-10 Trade and Investment Ch 5-8

L1

L2 L3



End Topic

Hill Chapters 1 to 4



End Topic

The 10% presumption Semi-Globalised

The World of CAGEs Distance still matter very

much

Globalisation is not an imperative!

It must add economic value

The world and Countries are closed systems

The old assumptions of how the World works are

pretty much the same

This will splits the world into winners

and losers.

The result is that, globalisation is an

imperative for frims and not just an

option

Globalisation of Markets (Teodore Levitt. HBR, 1983)

That the world is becoming more homogeneous

A powerful force drives the world towards a converging commonality, and that force is technology Shrinking time, space and distance

The globalization of markets is at hand. [the end of] the multinational corporation The Global Corporation

Countries like Corporations geared to this new reality ...... can decimate competitors the old assumptions of how the world works are forever gone A new world order

That distinctions between national

markets are fading

Gone are the accustomed differences in national or regional preferences

Distance matter less



End Topic

Multinational approach

Global approach Shrinking Time, Space & Distance

Distance matter LESS

To exploit the

differences

To overcome the

differences

To adjust to the

differences

Distance still matter very much!



End Topic

Before the

Great

depression 1

Trade volumes

reached the

1930 levels

GLOBALISATION

years

Avg 20's Avg 60's Avg 70's Avg 80's Avg 90's Avg 2000's* Avg 60-70's Avg 80-2000's

No of countries with exports as %

GDP greater than 35%** na 23 38 43 50 64

Estimate of re-exporting

percentage*** na 16.02 23.12 29.68 30.69 34.75 19.57 31.71

WORLD exports as % GDP 10 12.09 15.85 18.49 20.66 26.18 13.97 21.78

Estimate of value added exports as

% of GDP**** na 8.94 11.40 13.00 14.32 17.09 10.17 14.80

FDI as % of world Investment 6 1.3 1.6 2.71 6.13 10.14 1.45 6.33

* Excluding crisis years ** Excluding oil exporting countries ***Average of export % greater than 35% ****Ajusted by re-export percentage

The GATT years

The New World Order

(does not inclued the crisis

years)

Domestic Investment 90%

85%

15%

Exports % GDP

Domestic Exports

93%

7%

FDI % Investment

Domestic I FDI

Source: Smit, A.J. (2011). Management Perceptions about Globalisation of Markets and Production: Myth or Reality?



End Topic

Ex

po

rts

as

% o

f W

or

ld G

DP

15%

85%

FDI as % of World Investment

94% 6%

Local Industries 80%

1%

Global Industries

5%

Multi-domestic Industries

14%

Trading Industries

Source: Smit, A.J. (2011). Management Perceptions about Globalisation of Markets and Production: Myth or Reality?



End Topic

Patents

15%

Tourist

arrivals

Students 2%

Immigration 3%

V-Add Trade16%

Percentage Global

Mail 1%

Telephone Calls 2%

Direct Investment

6%

Management

Research

1%

Private

Charity

7%

Shares 20%

Internet Traffic

17-18%

Trade26%

Percentage Local

85 90 950 5 10 15 20 25 25

Source: World Bank, http://data.worldbank.org/indicator/NE.EXP.GNFS.ZS /1 Brakman, Garretsen, Marrewijk and Witteloostuijn (2006), Ghemawat (2007 and 2011), Smit, A.J. (2011).

14.8%



End Topic

Ex

po

rts

as

% o

f W

or

ld G

DP

15%

85%

FDI as % of World Investment

94% 6%

Local Industries 80%

1%

Global Industries

5%

Multi-domestic

Industries

14%

Trading Industries

(Source: Peng 2008) 95% of all Businesses are SMEs Producing 80% of world GDP Provide 60-70% all employment

(Source: Rugman and Verbeke, 2004) Fortune Global 500 ( sample 366): Of the 322 companies in the sample: 80% of their total sales (average) comes from the home region. Only 9 companies had sales of 20% or more outside their home region

(Source: Ghemewat 2007) Wal-Mart (largest company in terms of sales) Sales in 2005 = $ 300 billion USA sales = $204 billion (80%) International sales $60 billion (20%)



End Topic Index Topics

-The World as a Closed System

-The Eternal Triangle

-The Political Economy of Trade and Investment



End Topic

Changes the rules of the

GAME

Globalisation of Markets and Production

How to manage Across Borders

Socially responsive awareness and understanding

The Globalisation Debate

About Power, Politics and Special interest groups

Globalisation, Jobs, Income and the

Worlds Poor

Globalisation, and the

Environment

Globalisation and National

Sovereignty

Globalisation and Labour Policies,

Human Rights and Global Justice

L2 How Global is the World

Documents

Transcript of L2 How Global is the World