TOPIC #8

The Future of International Business

The Future of International Business

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Reduction of Protectionism European Union NAFTA Impact of Cultural Differences Global Dependency

The Future of International Trade

Protectionism a term to describe when countries seek to protect their individual economic interests by imposing tariffs on other countries or restricting external trade.

Economic experts agree that such practices will hurt the global economy as it is all interconnected.
APEC is the fastest growing trading group and largest trading bloc in the world and engages in protectionism practices by imposing tariffs and other trade barriers on countries outside of APEC.

European Union (EU)

27 European countries represent a single market in Europe All but the UK and Denmark have adopted a the euro as the single currency to be used in member states It has its own elected government EU court rulings over rule individual country court rulings and/or laws. Citizens of member states may travel, move, and work freely in each others countries. Population is currently about 370 milion.

Evolution of NAFTA

Will NAFTA emerge into a union similar to the EU where citizens of Canada, Mexico, and the US would be able to move freely into each others countries where one currency would be used for all three countries?

Impact of Cultural Differences

Culture the sum of a countrys way of life, beliefs, customs Influences how things are purchased, sold, Sets boundaries on what can or can not be done Impacts preferences, style, values, and norms May be represented by a specific language

Cultural Differences

In order to do business with differing cultures, much market research is needed to help companies understand various similarities and differences even when dealing with everyday cultural norms dealing with people such as: Punctuality Greetings Nonverbal communication signals Good Manners Decision making

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Punctuality
Punctuality Norms in North America? People are expected to be on time Rely on books, calendars and even pay a fee sometimes for missed appointments

Punctuality Norms in Other Countries Time is considered flowing, flexible, beyonds people control

Greetings
Shaking hands differs from one country to the next Eye contact made in some countries, not in others Bowing before an elder acquaintance versus not bowing at all

Nonverbal Communications Signals

Considered rude in Asian cultures to refuse someones request, so an Asian business person may not give a direct no answer to a sales request

A nod means yes to North Americans but no to a Bulgarian.

Shaking the head side to side means no to North Americans but yes to Bulgarians. The sign okay with ones hand is a symbol for money in Japan and is an offensive gesture in Brazil. Personal space interpretations also differs from place to place.

Good Manners
In North America, getting down to business is the norm when to business people meet.

In other Asian and Latin American countries it would be considered rude not to discuss family, friends, and favours first to establish a personal relationship before business.

Decision Making

In some cultures, decisions are made from the top down approach, in others, from the bottom up approach.

Other Differences

North Americans read from right to left.

Israel and Egyptians read left to right. This difference may impact the order in which a sequential advertisement is laid out from one country to another.

Other Sources

Wilson Jack et al. The World of Business, 5th Ed. Nelson Education Ltd., Canada, 2007