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International Management > 1. Environment of Global Managers > Flashcards

1. Environment of Global Managers Flashcards

1
Q

What is Globalisation?

A

Global competition characterised by networks of international linkages that big countries, institutions, and people in an interdependent global economy (Friedman, 2005)

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2
Q

What is the globalisation of markets?

A
  • Historically distinct and separate national markets are merging
  • “Global market”
  • Firms follow each other in the world
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3
Q

Features of a “Global market”

A
  • Falling trade barriers make it easier to sell globally
  • Consumers tastes and preferences converging
  • Firms promote by offering same basic products worldwide
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4
Q

France decrease in average Tariff rate

A 
1913 = 21%
2010 = 3.9%
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5
Q

US decrease in average Tariff rate

A 
1913 = 44%
2010 = 3.2%
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6
Q

Still significant differences amongst national markets, this requires what?

A
  • Customise market strategies
  • Product features
  • Operating conditions
    To meet conditions in particular markets
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7
Q

Example of customised difference in national market?

A

Bharti Airtel in India, call tariffs based on seconds not minutes

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8
Q

What % of all US exporters have less than 500 employees?

A

97%

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9
Q

What % of all small and mid-sized German companies participate in international markets?

A

98%

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10
Q

Benefits of globalisation of markets?

A
  • Ease of exporting

- Access to international markets

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11
Q

What is the Globalisation of Production?

A

Firms source goods and services from locations around the globe to capitalize on national differences in the cost and quality of factors of production like land, labor, energy, and capital

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12
Q

What are the benefits of the globalisation of production for companies?

A
  • Lower cost structure

- Improve quality or functionality of product offering

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13
Q

What is the globalisation of human capital?

A
  • Some firm reshoring jobs to lower shipping costs
  • Firms are outsourcing white-collar jobs to India
  • Winning war for talent is a pressing issue for global firms
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14
Q

What is the globalisation of Information technology?

A
  • Explosive growth of IT is both cause and effect of globalism
  • Speed and accuracy of info transmission changing nature of jobs
  • Cultural barriers gradually lowering
  • Tech dispersed globally by MNEs
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15
Q

Effects of Globalisation on Corporations?

A
  • Less tied to specific locations
  • Have to develop experienced international managers to remain competitive
  • Small companies also affected and effect globalism
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16
Q

What are the challenges to globalism?

A
  • Backlash against capitalism and rockingly of nationalism
  • Increased protectionism of high-demand resources
  • Need top managers with international understanding
  • Increasing pressure and publicity for CSR
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17
Q

“Guarded Globalisation” (Bremmer, 2014)

A
  • Political crises, cybertheft, protectionism, increased trade barriers, global trade slowdown
  • Govs find risky to continue opening to foreign competition
  • Governemnt intervention to give local players chance
  • Some countries build large foreign exchange reserves and boosted exports
18
Q

Who coined “Guarded Globalisation”?

A

Bremmer 2014

19
Q

Globalisation in the age of Trump (Pankaj, 2017) HBR

A

Problem: North America and Europe anti-globalisation sentiment, uncertain whether to retreat, change strategy or stay

Big Picture: Important to understand

  1. World is less globalised than most realise
  2. Even in face of a trade war, international trade and investment would still be too large for strategies to ignore
20
Q

What is Pankaj (2017) Problem?

A

North America and Europe anti-globalisation sentiment, uncertain whether to retreat, change strategy or stay

Globalisation in the age of Trump

21
Q

What is Pankaj (2017) Big Picture?

A

Important to understand

  1. World is less globalised than most realise
  2. Even in face of a trade war, international trade and investment would still be too large for strategies to ignore
22
Q

What are Pankaj (2017) Recommendations? Globalisation in the age of Trump

A
  • Don’t overreact to protectionist rhetoric, but do make adjustments
  • If operations unprofitable, retrench
  • Focus more on adapting to local needs
  • Ensure you’re creating value, not just extracting
23
Q

What are the there globalisation options?

A

Adaptation
Aggregation
Arbitrage

24
Q

Why Adaptation?

A

Boosts revenues and market share by tailoring products

and services to suit local tastes and needs

25
Q

Why Aggregation? (cluster)

A

Delivers economies of scale by expanding operations into regional or global markets.

26
Q

Why Arbitrage? (simultaneously buy/sell)

A

Exploits differences in labor costs, tax regimes, and other factors between national and regional markets.

27
Q

How Will The Global Economy Of The 21st Century Look?

A
  • Globalisation is not inevitable

- Globalisation brings risks

28
Q

Example that Globalisation is not inevitable

A

Signs fo a retreat from liberal economic ideology in Russia

29
Q

Examples of risks of Globalisation?

A
  • South East Asia financial crises late 1990s

- Global financial crisis started in US 2007-2008

30
Q

Supporters of increased trade and cross-border investment believe it means:

A
  • Lower prices for goods and services
  • Greater economic growth
  • Higher consumer income
  • More jobs
31
Q

Critics of globalisation worry it will cause:

A
  • Job losses
  • Environmental degradation
  • Cultural imperialism of global media and MNEs
  • Protesters show up at major meetings of global institutions
32
Q

How does Globalisation negatively affect jobs and income?

A
  • Critics argue that falling trade barriers are destroying manufacturing jobs in advanced countries
33
Q

How does Globalisation positively affect jobs and income?

A
  • Countries will specialise in what they do most efficiently and trade for other goods so all countries will benefit
34
Q

How does Globalisation positively affect labour policies and the environment?

A

Supporters argue that tougher environmental and labor standards are associated with economic progress as countries get richer from free trade

35
Q

How does Globalisation negatively affect labour policies and the environment?

A

Firms avoid cost of adhering to labor and environmental regulations by moving production to countries where such regulations do not exist, or are not enforced

36
Q

How does Globalisation negatively affect National Sovereignty?

A

Unelected bureaucrats have the power to impose policies on the democratically elected governments of nation-states

37
Q

How does Globalisation positively affect National Sovereignty?

A

Power of these organisations is limited to what nation-states agree to grant

38
Q

National Sovereignty and Globalisation

A

Is today’s global economy shifting economic power away from national governments toward supranational organizations like the WTO, the EU, and the UN?

39
Q

Gap between rich and poor nations getting wider?

A

1870, average income per capita in the world’s 17 richest nations was 2.4 x that of all other countries

1990, 4.5 x rich as the rest

Critics believe that if globalization was beneficial there should not be a divergence between rich and poor nations

40
Q

Supporters claim that the best way for poor nations to improve their situation is to:

A
  • Reduce barriers to trade and investment
  • Implement economic policies based on free market economies
  • Receive debt forgiveness for debts incurred under totalitarian regimes
41
Q

Globalisation impacts:

A 
Corporations
Jobs and Income
Labour Policies and Environment
National Sovereignty
World's Poor
42
Q

Globalisation of

A

Markets
Production
Human Capital
IT

International Management (5 decks)

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