Chapter_3 - Business Management: A Malaysian Perspective ©...

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Unformatted text preview: Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 3– 1 Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 3– 2 Competing in the Global Environment CHAPTER Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 3– 3 At the end of this chapter, students will be able to: LEARNING OBJECTIVES ¡ Define international trade, free trade, globalization and trade liberalization. ¡ Highlight the differences between absolute advantage and comparative advantage and explain how nations measure international trade. ¡ Explain why nations trade and list the advantages and disadvantages of international trade. Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 3– 4 At the end of this chapter, students will be able to: ¡ Define trade protectionism and identify the tools used to restrict trade. ¡ Explain on the emergence of trade blocks and elaborate on the role of World Trade Organization (WTO) in promoting free trade. ¡ Identify six different ways that may be taken to reach the global market. LEARNING OBJECTIVES (CON’T) Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 3– 5 FUNDAMENTALS OF INTERNATIONAL TRADE • International trade refers to transactions made between countries. • Simply, it is the export of goods and services among nations. • Basis of international trade – no single nation can produce all the goods and services that are needed by the society. Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 3– 6 ADVANTAGES OF INTERNATIONAL TRADE • Increase in the country’s total output. • Aggressive competition among businesses results in lower prices of goods and services. Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 3– 7 • Greater variety of goods and services for consumers to choose. • Increase efficiency in local production to match with the quality of imported products. ADVANTAGES OF INTERNATIONAL TRADE (CON’T) Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 3– 8 ADVANTAGES OF INTERNATIONAL TRADE (CON’T) • It promotes businesses to specialize and reap economies of scale. • It enables countries to produce what they can and buy the rest from trading partners in a mutually beneficial exchange. Business Management: A Malaysian Perspective © Oxford University Press Malaysia, 2008 All Rights Reserved 3– 9 HOW DOES A NATION KNOW WHAT TO PRODUCE AND WHAT GOODS TO TRADE FOR?...
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This note was uploaded on 02/03/2012 for the course IT 2010 taught by Professor Mohd during the Spring '11 term at Multimedia University, Cyberjaya.

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Chapter_3 - Business Management: A Malaysian Perspective ©...

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