IM - Globalization shift towards more interdependent...

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Globalization- shift towards more interdependent economy Factors of production- land, labor, and capital WTO - Polices the world trading system - Makes sure that nation0states adhere to the rules laid down in trade treaties - Promotes lower barriers to trade and investment IMF maintains order in the international monetary system World Bank promotes economic development United Nations Maintains international peace and security Develops friendly relations among nations Internationalization- Process by which firms increase their awareness of the influence of international activities on their future Establish and conduct transactions with firms from other countries. MNE (multinational enterprise) any business that has productive activities in two or more ccountries Reasons for going global - Growth - No foreign orders - Domestic market saturation - New tech - Growing markets Traditional:Uppsala Model - First domestic and then internationalization - Cons: lack of information and resources - Stage 1: no regular export 2. Export via independent reps 3. Overseas sales subsidiary 4. Overseas production Psychic distance - Sum of factors preventing or disturbing the flows of information between the firm and the market (language, geographic distance) Non-Traditional: Born Globals Firms that pursue internationalization at early stage - Main reason- niche markets and global networks The outward-looking perspective incorporates an awareness of the nature of competition in foreign markets Includes the following modes of activities: Exporting. Acting as licensor to a foreign company. Establishing joint ventures outside the home country with foreign companies. Establishing or acquiring wholly owned businesses outside the home country. The related modes of activity include: Importing/sourcing. Acting as licensee from a foreign company.
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Establishing joint ventures (JVs) inside the home country with foreign companies. Managing as the wholly owned subsidiary of a foreign firm. Global Industry- interdependent of operations across countries (central hub of activity with activities such as manufacturing done on a advantage basis) Multidomestic industry – all business functions in every country and treated on an individual basis to account for culture differences/ available resources Industry paradigms- a set of business assumptions shared by memebers of an industry - Provide structure and order - Restrict change Francis Fukuyama (harmonious view) The end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government. Samuel Huntington (clash of civilizations)
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This note was uploaded on 01/27/2012 for the course BUSINESS N/A taught by Professor N/a during the Fall '11 term at Washington University in St. Louis.

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IM - Globalization shift towards more interdependent...

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