Chap1 International management process Applying management concepts and techniques in a multinational environment Adapting management practices to different economic political and cultural environments Globalization the process of integration among countries around the world with a vision of a single market entity Social Economic Political Technological Cultural book The process of social political economic cultural and technological integration among countries around the world Benefits wealth jobs technology lower prices Criticisms off shoring of business service jobs to lower wage countries growing trade deficits slow wage growth environmental and social impacts Internationalization the process of a business crossing national and cultural borders Outsourcing The practice of having certain job functions done outside a company instead of having an in house department or employee handle them functions can be outsourced to either a company or an individual book The subcontracting or contracting out of activities to external organizations that had previously been performed by the firm Offshoring The process by which companies undertake some activities at offshore locations instead of in their countries of origin Agreements Global World Trade Organization WTO General Agreement on Tariffs and Trade GATT Regional Agreements North American Free Trade Agreement NAFTA US Canada Mexico U S Central American Free Trade Agreement CAFTA European Union EU Association of Southeast Asian Nations ASEAN Free Trade Agreement of the Americas FTAA Market Economy exists when private enterprise reserves the right to own property and monitor the production and distribution of goods and services while the state simply supports competition and efficient practices Command Economy is comparable to a monopoly in the sense that the organization has explicit control over the price and supply of a good or service The particular goods and services offered are not necessarily in response to consumers stated needs but are determined by the theoretical advancement of society Mixed Economy is a combination of a market and a command economy While some sectors of this system reflect private ownership and the freedom and flexibility of the law of demand other sectors are subject to government planning The balance allows competition to thrive while the government can extend assistance to individuals or companies European Union countries Privatization of traditionally nationalized industries Emergence of the EU as an operational economic union Economic linkages between the EU and newly emerging Central and Eastern European Challenge is to absorb former communist bloc countries Foreign MNCs gain foothold in EU by o Acquisitions Alliances Cooperative R D efforts The Four Tigers South Korea Hong Kong o Chaebols large family held Korean conglomerates o Affected by declining economies of Southeast Asia in 1990 s o Now part of People s Republic of China o Uncertainty about the role the Chinese government intends to play in local governance Singapore Taiwan o Least hurt by economic downturn of the 1900 s o Progression from labor intensive economy to one dominated by technologically sophisticated industries banking electricity generation petroleum refining and computers The Baby Tigers Thailand Malaysia Indonesia Inexpensive labor Large population base Considerable natural resources Attractive to outside investors Multinational Corporation An enterprise operating in several countries but managed from one home country Generally any company or group that derives a quarter of its revenue from operations outside of its home country book A firm having operations in more than one country international sales and a nationality mix among managers and owners BRICS economies Brazil Russia India China South Africa The economic potential is such that they may become among the four most dominant economies by the year 2050 with China surpassing the United States in output by 2035 4 major trading blocs EU European Union North America China Japan Foreign direct investment Investment in property plant or equipment in another country Social democracy refers to a socialist movement that achieved its goals through nonviolent revolution In business context similar to capitalism and connected to free market society People should be free to pursue economic and political endeavors without constraint Private property more successful productive and progressive than communal property Betterment of society related to level of freedom individuals have in pursuing economic 1 Ideologies Individualism goals Collectivism Does not value individual as such Views needs goals of society at large as more important than individual desires No rigid form of collectivism as societal goals differ greatly among cultures e g Fascism nationalism authoritarianism militarism corporatism collectivism totalitarianism Socialism Government ownership of institutions Profit is not the ultimate goal Can be viewed as moderate example of collectivism in practice Has been practiced in China North Korea Cuba Democratic socialism more moderate form practiced by Great Britain s Labour Party and in France Spain and Greece Communism is extreme form of socialist thought Fascism is an authoritarian political ideology generally tied to a mass movement that considers individual and other societal interests inferior to the needs of the state and seeks to forge a type of national unity usually based on ethnic religious cultural or racial attributes Communism is an extreme form of socialism which was realized through violent revolution and was committed to the idea of a worldwide communist state European roots System in which government is controlled by citizens either directly or through elections Democratic society cannot exist without at least a two party system Once elected representative is held accountable to electorate for actions which limits 2 Political Systems Democracy power of government Totalitarianism Only one representative party which exhibits control over every facet of political and Power maintained by suppression of opposition Dominant ideals include media censorship political representation denial of rights and human life civil liberties Four Global Foundations of Law short answer question Islamic Law Derived from interpretation of Qur an and teachings of Prophet Muhammad Found in Islamic countries Middle East and Central Asia Socialist Law Origins in Marxist socialist system