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Enterprise.docx - 1.-The new rules of globalization:...

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1.-The new rules of globalization:Guarded globalization:Governments of developing nations have become wary of opening more industries tomultinational companies and are zealously protecting local interests.They choose the countries or regions with which they want to do business, pick the sectorsin which they will allow capital investment, and select the local, often state-owned,companies they wish to promote. That’s a very different favor of globalization: slow-moving, selective, and with a heavy dash of nationalism and regionalism.factors have contributed to this trend:1.governments find it risky to continue opening industries to foreign competition(because local companies and consumers often attempt to block new entrants)2.some countries have built large foreign exchange reserves and boosted exports, sothey are no longer trying to attract large amounts of foreign investment.3.governments are defining national security more broadly. As financial instability,cyber espionage, and increases in food prices, for instance, become global issues,the financial services, information technology, telecommunications, and foodsectors have all been politicized.4.China, which will soon have the world’s largest economy, now establishes, ratherthan follows, international business rules and norms.5.policy makers in developing countries are intervening to create uneven playingfields that give local players an advantage.State capitalism:Has become popular in emerging markets, helps autocratic or corruptgovernments stay in power, they also realize that if they allow the market to decide whichcompanies win, they risk losing political power, because they will no longer control job creationand their citizens’ living standards. Whereas the free market system’s motive of maximizing profitsand growth is economic, state capitalism’s goal is politicalObjective:to control the wealth that markets generate by allowing the government to playa dominant role through public-sector companies and politically loyal corporations.Strategies to Manage Guarded Globalization:Stay homeBecome more “strategic” at home:Some companies choose to boost their value to theirhome government instead of looking to create value abroad.Use the state to fight other states:Some companies may have the means to usegovernment-to-government relations to sort out problems.Strike alliances:Partnerships can help in many industries (joint ventures).Add value to the state:A single product company must often find a new way to add valuein the host country.Become too diversified to failBuild it so that you can stay (ex. Africa)Capitalize on state capitalism:hiring local workers and using local materialsANTICIPATING RISKS:developing creative strategies to manage themGlobalization and International Business:(1)
Globalization:the ongoing social, economic, and political process that deepens and broadens the

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Term
Fall
Professor
Jaime
Tags
International Trade, regional economic integration

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