Chapter 8 Power Point

Chapter 8 Power Point - Chapter 8 Global Management 1. The...

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Unformatted text preview: Chapter 8 Global Management 1. The necessity of global trade and business 2. Trade barriers, protectionism, and trade agreements 3. Some forms of global business 4. Cultural issues and challenges Outline Over 60 % of the revenue at both GE and P&G are now derived internationally. Doing business internationally is no longer just about cheap manufacturing. It is also about growth, opportunity, and emerging consumer markets and a new global middle class. Global Business & Global Mgt. Corporations that own businesses in two or more countries. (recall eg. of Coca Cola India…) 1970: 7,000 MNC’s in the world. Most based in the US and the UK Today: 56,448 MNC’s, and 71.5% are based in other developed countries, 26.1% in developing countries, and 3.1% in the US. Multinational Corporations (MNC’s) Eg. Yum Brands in China: WSJ Article When a firm builds a new business or buys an existing business in a foreign country. Direct Foreign Investment 7 Direct Foreign Investment in the U.S. 8 Direct Foreign Investment in other countries To protect local companies & workers from foreign competition, governments use trade barriers (or government-imposed regulations) Two types of trade barriers: ◦ Tariff : A direct tax on imported goods ◦ Nontariff barrier : Methods that increase the cost or reduces the volume of imported goods Quotas, voluntary export restraints, government import standards, governments subsidies, & customs valuation/classification Currency valuation…in China, for eg?? 9 Trade barriers Since 1948, the General Agreement on Tariffs and Trade (GATT) established rules of trade for countries to follow 124 countries agreed to adopt the GATT ◦ Reduce/eliminate tariffs ◦ Limit government subsidies (U.S. complaints about China, for eg.) ◦ Establish protections for intellectual property (pirated music, film, software…) GATT’s overall goal? Encourage trade between member countries. 10 Worldwide effort to reduce trade barriers - GATT GATT made it easier and cheaper for consumers in all countries to buy foreign products....
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This note was uploaded on 11/09/2011 for the course PSY 1310 taught by Professor Brown during the Spring '07 term at Texas State.

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Chapter 8 Power Point - Chapter 8 Global Management 1. The...

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