Interdependence of economic technological socio

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interdependence of economic, technological, socio-cultural, and political systems across diverse geographic regions - Advocated by leading economists and politicians post World War II. - Movement led to the creation of several international trade agreements Global Trade Agreements - World Bank - International Monetary Fund - GATT European Union - Created a single market by a system of laws that apply in all movement of people, goods, services, and capital - Introduced a common currency, the Euro o Designed to build a single market (Germany is dominant) *Issues with Greece and Google and America’s Tech Industry NAFTA: Came into effect in 1994 - U.S., Canada, and Mexico signed the treaty to eliminate tariffs - Maintains trading restrictions on certain products - Industries have benefitted from the opening of borders Apple’s grip over the smart phone industry 92% Comparative Advantage - Countries should specialize in producing goods for which they have the lowest opportunity cost of production o Specialization in a particular product helps become a efficient producer - Free trades lead to a more efficient allocation of resources o Results in all countries that are involved in trade benefitting from access to cheaper goods Managing in Uncertain Times Business Leaders - Respond to changes in the global business environment and try to change it - Lobby to influence the government’s role in business - Identify growing market niches or target consumer segments and invest in research and development - Are proactive in adapting their strategies to an ever-changing global marketplace - Deal with a broader array of stakeholders including public advocacy groups, community forums, and the media Uncertainty: A function of three elements Environmental Change the rate at which a company’s environments change Stable Environments = slow rate of change Dynamic Environments = fast rate of change Punctuated Equilibrium Theory Companies cycle through stable and dynamic environments Environmental Complexity The number and the intensity of external factors in the environment that affect organizations Simple vs. Complex Environments Resource Scarcity the degree to which an organization’s external environment has an abundance of scarcity of critical organizational resources Example: Delta’s Airlines’ singular strategy * External environments are the forces and events outside a company that have the potential to influence or affect it
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Uncertainty: the extent to which managers can understand or predict which environmental changes and trends will affect their businesses A function of: 1. Environmental change 2. Environmental complexity 3. Resources scarcity The Business Environment Represents all of the external forces that affect the firm’s business General Environment includes the technological, economic, political/legal, and socio-cultural dimensions that affect a firm’s external environment Task Environment includes entities that directly affect a
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  • Spring '14

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Christopher Reinemann
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